As Donald Trump meets Kim Jong-un the rhetoric and threats of trade sanctions between the US and China rumble on. The next looming deadline. the 15th June when Trump publishes his latest list of affected products to face higher tariffs. This follows the announcement at the end of last month that the US were going to place 25% tariffs on $50 billion of Chinese imports.
This is clearly a very important issue to a country which currently enjoys a $375 billion trade surplus with the US. Beijing is annoyed by Trumps policies, his about turns and is right to be concerned. A real escalation is however unlikely as the fallout will hurt America as much as China, but it doesn’t mean there won’t be a rocky road along the way. As reported in the Economist the likely ‘war’ will more likely center around access to technology, training, investment and access to markets rather than a straight ‘tit for tat’ increase in tariffs.
China can and will fight back and one important strategy is to improve economic links with other countries. It is particularly keen to access technology whilst at the same time rapidly advancing it’s own technology infrastructure. China is also opening its doors just a little to foreign businesses with the aim of creating goodwill and increasing trade.
With the UK about to be freed (hopefully) from the shackles imposed by the EU it is vital for the British government and British business to take advantage of this hiatus to firmly establish a foothold in the Chinese market place. It does however require our leaders to put Britain and British workers first (sound familiar) even at the risk of offending our transatlantic friends. If president Trump’s recent forays are anything to go by, particularly at the G7 summit, multilateral agreements and collective deals are a thing of the past. Bilateral agreements are the new diplomatic language. There are real opportunities for increased bilateral trade between the UK and China but it requires vision and courage of businesses to invest in the future. With the right backing, support and knowledge there is a real possibility to create the growth the UK economy needs now.