A makeshift mendingThe United States and China struck a truce on a face-off on the trade front. In a joint statement on Saturday after a three-day negotiation, Beijing agreed to “significantly increase” its purchase of U.S. goods and services to help “substantially reduce” Uncle Sam’s massive trade deficit with China. The two countries agreed on “meaningful increases” of U.S. agricultural and energy exports and to address China’s infringement on U.S. intellectual property rights. Washington may have settled for an agreement that fell short of specifying a numerical goal to clear the air ahead of a nuclear showdown with Pyongyang.
A trade war between the world’s two largest economies has been put on hold. But since the agreement leaves out details for the timetable and scope for Beijing to reduce the deficit, conflict between the two can resurface at any time.
White House National Trade Council Director Peter Navarro has been harshly critical of China’s unfair trade practices, especially regarding the theft of U.S. intellectual property and forced transfer of technologies through acquisitions of America Inc. by Chinese sovereign funds and public enterprises. Beijing has been an eager sponsor of overseas technology acquisitions under the goal of becoming a powerhouse in innovation by 2025. Its expansion campaign is mostly likely to create friction with the U.S. government.
The easing in trade tensions is good news for the export-reliant Korean economy. But Seoul must keep its watch as reports suggested the two states could have made a deal to use more U.S. chips over Korean products.
The government and industry must stay vigilant to lessen damage to Korean exports from the developments on the trade front.
JoongAng Ilbo, May 21, Page 26