Reconciliation there has been lot of rhetoric and

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Reconciliation There has been lot of rhetoric and statements from both sides. The standard protocol in a trade dispute is: One country takes action against another country, which hits back with a proportional response and then both sides call a de facto truce. Neither Washington nor Beijing's tariffs will take effect immediately. The US had laid out a roughly six to eight week period for the tariffs to receive public comment before going into effect. China's announcement, on the other hand, did not include a date. Beijing is hoping backdoor discussions will persuade Washing- ton to hold off on the tariffs, thus preventing the need for retaliation. China would not implement its tariffs until after the US takes action. China would adjust its de- cision based on what the US does. Trump has to decide whether to accept some- thing like the deal offered by the Chinese or to proceed with the tariffs on $50 bil- lion of imports. China then would certainly proceed with the matching tariffs on $50 billion that it has identified. It has been observed that whenever Trump or his officials talk tough on China, the US stock market falls. Whenever there is more conciliatory talk about negotiating an agreement, markets rise. This is an indication that major companies have a lot at stake in resolving the dispute, preferably with some better market ac- cess, rather than having a trade war. Also, there are a number of farmers in Trump country who have a lot to lose if exports to China are penalised. There are strong incentives for Trump to accept something like the deal offered by China and to declare victory. China, which is worried about the health of its financial sector, appears to be willing to open up certain markets, responding to domestic concerns. Details remain in the works. Beijing already has shown willingness to make several con- cessions to Washington including: -
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US - CHINA Trade War: Analyses of Deeper Nuances and Wider Implications 29 Reducing investment restrictions on financial, automotive and other sectors. Offering to increase the market access on restricted financial and service industries. Purchases of various US exports, such as liquefied natural gas and semiconductors. But, China has so far been making offers that carefully align with its own domestic reform priorities. As its domestic market grows more robust, it is not likely to concede to changes that alter the foundation of its heavily state influenced economy, which is what hawkish US negotiators want most. On April 10 2018, at the Boao Forum for Asia known as China Davos ’, Xi Jinping made some eagerly - awaited statements in his keynote address. Some of these were: - In the automobile area, in addition to the tariff reduction on cars, Bei- jing would permit more foreign investment in domestic auto companies and financial services and greater protection for intellectual property.
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