“Not even a little bit!”

When trade volume decreases globally, it seems not being appropriate sticking to old levels of agreement - Photo by chuttersnap on Unsplash

While the whole world suffers from the Corona – crisis, some nations move closer together, some of them strike more nationalistic tones. Donald Trump remains being tough. 

When asked whether he is considering renegotiating the China – USA trade agreement, he answered: “Not even a little bit”. The facts are clear. The USA has promised not to increase or raise any further tariffs. In return, China has pledged to buy US goods worth $200 billion more every year, compared to 2017 figures.

Now the situation is what it is. The corona crisis is keeping the world on tenterhooks and reducing global production growth and trade volumes. Especially the markets in China and the USA are not spared. It seems inappropriate to insist on old figures and to calculate on a basis of 2017. 

What will happen is this: the Chinese will not be able to make the required product purchases. This gives the US administration the reason to impose new tariffs and customs duties. The Chinese government will most likely not let this happen because of the obvious injustice. It is to be feared that China, too, will reintroduce or continue the tough economic measures against the USA.

Thus, within the next two years a new trade dispute between the USA and China will rise. While the world economy will probably have just overcome the global corona crisis, the two economic powers will once again shoot at each other.