It is now a year since China criticized and even called a boycott of South Korea’s products following Seoul’s decision to allow the US to deploy their antimissile system. Beijing saw the move as a threat to her security. However, on Tuesday, the tables turned for South Korea following the boycott lift by China. This happened as the two countries finally decided to bury the hatchet. Nonetheless, South Korea continues to keep the antimissile system.
The move, which can be termed as abrupt and unexpected, is likely to scramble Donald Trump’s calculations on dealing with allies just a day to his first trip to Asia since becoming America’s president.
China’s President Xi Jinping’s move seems to support the narrative that China’s lack of support for the US to deploy the system in South Korea would not weaken the ties that the US has with the South Korean government.
Despite the lift, it is feared that Donald Trump could still face challenges while trying to lobby support from other nations in the region to put more pressure on North Korea to stop their Nuclear and missile programs. However, the economic ties that are rebuild will likely improve the diplomatic and bilateral relationship between the two nations.
As it is, North Korea’s president Moon Jae-in is ready for diplomacy talks with her North Korea’s counterpart than even Donald trump or Japan’s Premiere, Shinzo Abe.
China and the United States were negotiating some recent economic policies this week, but those talks mostly appeared to have fallen through without much progress in Sino-American relations.
However, a new announcement indicated that the rice market in China is being opened up to American companies for the first time. China first opened up twenty years ago, namely for Asian suppliers. China is the largest consumer of rice in the world and opening up these markets to American producers should allow them to increase revenues.
China imports about five million tons of rice per year, spending up to $1 billion when doing so. This is more than the United States exports which is approximately three to four million tons per year. Still, the deal with the United States will allow the country to diversify away from Asian producers and have several options for importing the stable food in China.
China was previously able to feed itself with rice, but has experienced challenges in doing so, namely in relation to their rapidly aging population which is not able to produce the rice needed by the population. Further, the quality of the soil is depleted and pollution problems contribute to the inability to feed the population with internally produced rice.
The U.S. President, Donald Trump, and his administration, has made a point of attempting to reduce the trade deficit that exists with China by opening up several different industries that China restricts foreign investment with, as well as manipulating their currency. China’s economy is rapidly expanding and growing and is the second largest economy in the world and is poised to become the largest in the next century, namely as a result to their large population.
Chinese officials will inspect U.S. rice supplies before allowing U.S. exporters to import to their country. This may be the first step to opening up a potentially large market.
Talks with China appear to have broken down over revising the economic policy and opening up China to more trade with the United States. In scheduled talks, Wilbur Ross and Steve Mnuchin broached the topic of opening up China to more United States competition which the Chinese government has balked at.
China is currently protecting many facets of their economy, thereby protecting jobs in their country. The United States currently does not have any tariffs or restrictions on Chinse companies operating in the United States which many individuals have indicated lead to unfair treatment on the part of China.
The United States has been attempting to ease these regulations as well as confront China about currency manipulation that places United States exporters at a disadvantage to the United States. Many are indicating that the United States should implement new tariffs to combat these forms of governmental support.
President Donald Trump has indicated his intention to place a 55% tariff on Chinese goods, though many are attributing this to bluster and think a course of action such as this unlikely. China would likely reply with a tariff of their own which could have a major impact on the world economy. A trade war between the United States and China could potentially push the world economy into a recession and threaten many notable industries that the U.S. has significant exports to China including soybeans, technology, and a wide range of food products.
Wilbur Ross and Steve Mnuchin announced that the talks with China will continue and believe that their differences will be ironed out to the mutual satisfaction and benefit of both China and the United States. While talks will continue, they will do so absence of any concrete results from these discussion, along with much uncertainty about the future of Chinese and American economic relations.