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China – partial platform.

I always saw the China Trade Talks as more blustery and windy optics than robust substance.

But perhpas it is time at least for a rain check.

The new accord may unravel. It is certain that the next phase wil be no slam dunk. A great deal of substance remains to be negotiated. China still subsidises its manufacture. There has been no agreement over cyberattacks and 65% of the US tariffs remain in place. It is a moot point as to whether the whole effort was counterproductive – it certainly created significant extra risk, created capex uncertainty, and has demolished hitherto working supply chains. But it does look as though the two likely super powers of the next century have at least begun to talk with something like intent.

This could evolve into a platform for working out how the world is going to cope with the big challenges that lie ahead especially Climate Change, Poverty, Health Care and Education. 

 These are inherently global issues and they demand collaboration betwen the two great nations. To do that they must understand and appreciate each other . If the 2020 Trade Accord is a first step towards this then indeed it will have been worth it.

A final thought.

Several other nations – Brazil in the case of Soya beans – have benefitted from stepping up their supply as China moved its offtake from the US in the face of the tariffs to new countries all of whom desperately needed the business. These countries will now lose their market. Negotiations like this are never so simple – what one nation gains another may lose. The US needs to be sensitive to this if it is not going to look increasingly like the bully boy on the block indifferent to the suffering it causes. More on this later.

Have a good day, James