JAKARTA (TheInsiderStories) – United States (US) and China trade talks in Washington is now battling on currency pact issues. Both parties haven’t yet agreed on the enforcement in a proposed currency deal that would ensure Beijing lives up to its promise to not depreciate the yuan.
Previously, US President Donald Trump accused China of gaming its currency to gain a competitive advantage. US Treasury Secretary Steven Mnuchin described that the currency pact discussion as the strongest ever.
While, Trade Representative Robert Lighthizer said that any deal with China needs to contain a strong enforcement mechanism to ensure long-lasting changes to the trading relationship. He also stated that the negotiators have made progress on structural issues related to the Chinese economy but still face obstacles.
US asked China to keep Remimbi value stable as part of trade negotiations. If successful, that would neutralize any effort to devalue Yuan and make China’ exports cheaper to help counter US tariffs.
Even so, Trump claimed the talks as very productive, in his twitter. He also praised China and Russia support, also cited the potential for fast economic development in North Korea if it abandons its nuclear program.
“President Xi of China has been very helpful in his support of my meeting with Kim Jong Un. The last thing China wants are large scale nuclear weapons right next door. Sanctions placed on the border by China and Russia have been very helpful. Great relationship with Chairman Kim!” he tweeted.
Followed the meeting, President Trump delayed his own deadline to increase tariffs on Chinese import goods US$200 billion on Sunday. The delay is likely to calm volatile financial markets and reassure business owners who depend on China both for components and as a market for finished goods.
Trump hoped to sign a final deal in person in a meeting with President Xi Jinping of China, most likely in March at Mar-a-Lago, the president’s Palm Beach resort, but no new deadline was set. An American delegation is expected to travel to Beijing sometime between now to prepared the meeting.
The World Trade Organization (WTO) predicted the trade tensions between US and China, political risks and financial volatility will continue to put pressure on global trade. The trade weaknesses will expand into the first quarter (1Q) of 2019, told the official report released on Feb. 19.
In the latest quarterly outlook indicator from World Trade Outlook, the composite of the seven trading drivers was recorded at 96.3. This is the weakest point since March 2010 and a decline of 98.6 in November 2018. A figure below 100 is a signal for growth below the actual trend in the 1Q.
“The simultaneous decline in several indicators related to trade should make policy makers wary of a sharper slowdown if current trade tensions remain unresolved,” WTO said.
The organization further warned of the impact of US and Chinese trade war on global trade. The leading quarterly indicator of world trade in merchandise dropped to its lowest level in nine years. If trade tensions continue, a sharper slowdown will occur soon, said WTO.
“This ongoing loss of momentum highlights the urgency of reducing trade tensions, which together with political risks and persistent financial volatility can signal a broader economic slowdown,” said the report.
by Linda Silaen, Email: email@example.com