Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Trade deal no panacea for rocky U.S. relations with China

Published 01/16/2020, 07:12 AM
Updated 01/16/2020, 07:12 AM
© Reuters. Chinese Vice Premier Liu He and U.S. President Donald Trump shake hands after signing "phase one" of the U.S.-China trade agreement at the White House in Washington

© Reuters. Chinese Vice Premier Liu He and U.S. President Donald Trump shake hands after signing "phase one" of the U.S.-China trade agreement at the White House in Washington

By Andrea Shalal and Cate Cadell

WASHINGTON/BEIJING (Reuters) - From Huawei to the South China Sea, deep political rifts between Beijing and Washington are set to persist, despite a trade relations breakthrough, as the United States pushes back against an increasingly powerful and assertive China.

Relations between the world's two largest economies have deteriorated sharply since U.S. President Donald Trump imposed punitive trade tariffs in 2018, igniting a trade war.

"The broader, darkening picture is not going to be brightened much by this deal," Bates Gill, an expert on Chinese security policy at Macquarie University in Sydney, said of the initial trade deal signed on Wednesday.

This backdrop spans China's militarization of the South China Sea; rising tensions over Taiwan, which Beijing claims as its own; U.S. criticism over human rights in Hong Kong and Xinjiang and a backlash against telecoms gear provider Huawei.

While the initial deal defuses an 18-month row that has hit global growth, experts say it is unlikely to provide much balm for broader frictions rooted in U.S. fears over an economically and technologically powerful China with a modernizing military.

"We can see Phase 1 as an emergency treatment to lower the temperature, but it has not addressed the fundamental problems," Wang Heng, a professor at the University of New South Wales in Sydney who studies the China-U.S. economic relationship, said.

HOSTILITY

Washington is increasingly alarmed about the security implications of Chinese technology, and has tightened its rules to keep better tabs on acquisition of key technology by China, setting in motion changes to the global supply chain.

"The Chinese leadership are not naive about this," said Gill. "They are already making moves to be more autonomous and thinking about a future ... in an environment of hostility."

The Trump administration put Chinese telecoms equipment giant Huawei Technologies Co on a trade blacklist on national security concerns in May, banning it from buying supplies from American firms without U.S. government approval.

It has also taken measures to crimp exports of artificial intelligence software.

The two countries are also at odds over Taiwan, which counts the United States as its biggest weapons supplier but which China sees as one of its provinces.

Taiwan's President Tsai Ing-wen was re-elected on Saturday, vowing not to submit to Chinese pressure or control.

Tsai's campaign was helped by seven months of anti-government protests in Hong Kong, which Beijing accuses Washington of helping to foment, eroding China's case for a "one country, two-systems model" similar to Hong Kong's for Taiwan.

U.S. Army Secretary Ryan McCarthy said last week that China "will emerge as America's strategic threat" and that the United States planned to deploy two task forces to the Pacific over the next two years capable of information, electronic, cyber and missile operations against Beijing.

Treasury Secretary Steven Mnuchin told CNBC on Wednesday that the United States was concerned about other issues involving China but these should be dealt with separately.

© Reuters. Chinese Vice Premier Liu He and U.S. President Donald Trump shake hands after signing "phase one" of the U.S.-China trade agreement at the White House in Washington

"You have to negotiate different pieces at different times".

Latest comments

Envious negative comments against the huge success created by our great leader, president Trump.
Don't worry. China will find a way to demolish any gains made here in short order by cheating, stealing, spying or hacking. It's what they do well. They have no interest in sitting at the adult table.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.