Trade Policy

The Premier of two superpowers - U.S. and China held 90-minutes telephone conversation on Thursday as the relationship between the two countries straining on a rolling wheel over the recent months on various matters. President Joe Biden and President Xi Jinping spoke for the second time in seven months since Biden took office. A readout of the call provided by the White House states “The two leaders had a broad, strategic discussion in which they discussed areas where our interests converge, and areas where our interests, values, and perspectives diverge. They agreed to engage on both sets of issues openly and straightforwardly. This discussion, as President Biden made clear, was part of the United States’ ongoing effort to responsibly manage the competition between the United States and the PRC”. The statement implies a clear indication to the Chinese counterpart on maintaining a balance of fair-trade practices between the two countries. President Xi on the other hand, emphasized the current U.S. policy on China has a role to play in straining ties between the both the countries. However, both countries agreed on to resolve open issues regarding fair trade policies on a mutual ground and not to extend existing conflicts further. President Biden’s policy on China follows what was initially laid out by the Trump administration. However, the current administration plans to maintain coordination with allies and work on concerns at the mutual interest of both. According to Xinhua report, President Xi said, "If China and the US work together, both countries and the world will benefit; If China and the US confront each other, both countries and the world will suffer. China-US relation is not a choice question that whether it needs to be done well, but a required question that how to do it well," The U.S. - China trade war began in January 2018 by the Trump’s administration when he exercised substantial tariffs and other trade barriers in an effort to establish fair trade practices by Chinese companies that do not undermine growth of the U.S. companies. As of date, China remains U.S. main trading partner with a trade deficit of $299.32 billion. World trade has been substantially affected due to the long course of trade war between the two economic superpowers. As countries worldwide race against COVID-19 pandemic to revive the economy, another trade war tension could further undermine stability in the market and sink recent historic gains by global indices.