Current trade negotiations between the U.S. and China appear destined to fail, notes a new report jointly issued by the Cathay Bank and the University of California at Los Angeles.
The report, The Trade War Deepens, contends that both sides have taken on intractable positions in the ongoing dispute, with the U.S. upping the ante, owing to its contention that China has taken advantage of trade laws over the last several decades.
China, meanwhile, says the report, is “framing the trade war as an example of U.S. imperialism.”
“Economic analysis of past trade disputes and tariff barriers suggests that the U.S. will be purchasing more, higher-priced goods from other countries and that the U.S. supply chains will diversify, if not completely change,” the authors of the report, economists William Yu and Jerry Nickelsburg, contend.
They continue: “China will continue, indeed intensify, its pivot toward South and Southeast Asia for trade in goods and toward European companies for foreign investment.”
Although there has been some give-and-take in the talks, especially centered on negotiators settling for a partial deal, reports indicate that both sides have proven increasingly reluctant to address the thorny issues of state subsidies and forced technology transfers.
As it now stands, tariffs on $250 billion in China imports are scheduled to go from 25 percent to 30 percent on October 15. An additional 15 percent levy on Chinese imports will kick in on December 15.
Building materials exported from China to the U.S. include softwood lumber, fiberglass doors, acoustical ceilings, commercial and residential flooring, and both stainless steel kitchen sinks and plywood kitchen cabinets.
By Garry Boulard
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