- Donald Trump angered China by referring to the coronavirus as the “Chinese Virus” in a tweet.
- The war of words over the coronavirus risks cutting off diplomacy at a time when China may need to renegotiate its side of January’s trade agreement.
- Ultimately, the Trump administration’s rhetoric risks pushing US-China trade negotiations into a more aggressive phase.
Donald Trump is at it again. Referring to the coronavirus as the “Chinese Virus” in a tweet and then defending the slur later, the president provoked an angry reaction from Beijing. And with his latest provocations, the dormant US-China trade war may take a decisive turn for the worse.
Donald Trump Never Ended the US-China Trade War
Coronavirus had already increased those risks even before Trump began launching pointed attacks at Beijing. By causing the Chinese economy to shrink , it threatens to undermine China’s ability to satisfy its side of January’s trade agreement .
As part of that agreement, China committed to purchasing an additional $ billion of US goods by December . Even at the time, the Trump administration marketed the deal as a preliminary step towards a longer-term resolution. It didn’t entirely resolve the long-simmering conflict between the two rival superpowers.
That was apparent when the U.S. left tariffs on roughly $ billion of Chinese goods.
But it’s more evident than ever given the recent coronavirus rhetoric coming out of Donald Trump and the White House: Source:
Needless to say, China isn’t especially happy about Donald Trump’s choice of language. Its foreign ministry spokesperson, Geng Shuang, was quick to issue a statement rebuking him for using the term “Chinese Virus”:
Some politicians in the US associated the coronavirus with China, and smeared China. China expresses its strong anger and opposition to that.We call on the U.S. to stop finger pointing at China.
Compared to some of his colleagues, Geng’s response to Trump is understated. Because another foreign ministry spokesperson, Zhao Lijian,
recently repeated the conspiracy theory that the coronavirus is a bioweapon created by the US military .
Such exchanges risk causing a breakdown in U.S.-Chinese diplomacy. And at a time when China may struggle to fulfill its half of January’s agreement , such diplomacy will be sorely missed in the coming months.
Coronavirus Is Crippling the Chinese Economy
Donald Trump’s indelicacy is one thing, but the coronavirus has already exerted a severe impact on the Chinese economy.
) In January and February, Chinese industrial production fell by . 5% , compared to the same period last year. . Retail sales dropped by . 5%, fixed asset investment declined by . 5%, and private sector investment fell by . 4%.
Economists predict a contraction for China in Q1 5658. And if the coronavirus situation worsens, the economic pain will continue.
If it does, it will be hard to see how China could purchase $ 310 billion more of American goods before the end of December
“There is now no chance of China fulfilling its import targets within the timeframe set by the text of the agreement, ”said TS Lombard economist Rory Green, speaking to Channel News Asia.
The January trade agreement does refer to an “unforeseeable event” creating possible exemptions from its terms. But only if both parties agree.
Given that Donald Trump and his administration have been busy smearing China in recent weeks , they’ve reduced the chances of such consultation being constructive.
Which means: expect Donald Trump’s rhetoric and the US-China trade war to get worse rather than better.
Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com.
This article was edited by Josiah Wilmoth
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