Editorial | Despite pause in US-China tariff war, expect more global fragmentation
Long periods of truce at the current tariff levels may not be ideal for the business sector but this buys time to prioritise negotiations
Since US President Donald Trump launched his global trade war in April, the United States and China have held three rounds of high-level negotiations on the neutral ground of Geneva, London and now Stockholm. The ultimate result of what both sides said were constructive talks is agreement to extend the 90-day pause in the sky-high tit-for-tat tariffs, originally due to end by August 12, without setting a deadline.
None of these issues will be resolved any time soon, but the two countries realise it is not a desirable option to go back to the tariff retaliation phase.
Both sides would push for the continued extension of the pause on reciprocal tariffs on the US side as well as countermeasures on the Chinese side, said Li Chenggang, China’s vice-minister of commerce, after the negotiations concluded.
We are likely to see long periods of truce based on the current tariff levels. For the business sector this may not be ideal, but it is not unworkable in the sense that it will wreck bilateral relations. Importantly, it will buy time to prioritise negotiations.