ASSESSMENTS

The U.S. and China Reach a Trade War Truce

May 22, 2018 | 16:05 GMT

U.S. Commerce Secretary Wilbur Ross delivers a speech in May 2018. An agreement by China to increase imports of U.S. goods and services appears to have cooled off some of the heated trade rhetoric between the two countries.

(CHIP SOMODEVILLA/Getty Images)

Highlights

Despite its tentative trade truce with China, the United States will likely keep its tariff and non-tariffs options open.
De-escalation of the trade spats could mitigate some potential negative impacts on politically sensistive U.S. agriculture exports for the short term and increase the prospect of rising U.S. liquified natural gas exports.
Even if the two sides can reach a deal on issues such as boosting U.S. imports to China, the underlying competition between them will persist far beyond the current presidential administration in Washington.

An agreement by China to increase imports of U.S. goods and services appears to have cooled off some of the heated trade rhetoric that had been building between the countries over the past few months. But a statement issued May 19 after two days of talks in Washington between trade delegations that included Chinese Vice Premier Liu He and U.S. President Donald Trump left the details of those purchases vague. Although the immediate danger of a trade war between the United States and China appears to have eased, the longer-term competition between the world's largest economies will continue to put them at loggerheads....

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