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TRADE WAR: U.S and China Outline Deal to End Standoff

Feb 25, 2019

By Zarifa Huq


trump chinaClosing in on a 7-month-long trade war, the United States and China have begun to draft pledges on their most difficult trade negotiations. The two nations have slapped tariff after tariff on each other, hindering economic growth globally.


Though officials have come together for talks in Washington, results remain elusive as President Donald Trump’s administration’s demands continue to be at odds with China’s. Both parties are pushing for an agreement by March 1st, which marks the end of a 90-day truce between Trump and Chinese President Xi Jinping. Though the deadline continues to inch closer, President Trump has said that it’s not a “magical date,” implying that it may be extended.  As it stands, the 10% tariffs on $200 billion worth of Chinese goods would rise to 25%.


Sources close to the talks say that negotiators are creating six memorandums of understanding (MOU), most notable of which are what the U.S. calls “illicit technology transfers and improper subsidies” for state-owned firms. President Jinping has given his representative, Vice Premier Liu He special envoy status, indicating that he is a decision-maker.


The United States’ officials object to the industrial regulations and practices that they believe keep U.S. firms and goods out of China and give unfair advantages to domestic companies. The administration alleges China is forcing U.S. companies to give up intellectual property secrets, though China denies this accusation. Both countries have put in writing some details of enforcement. To date however, verbal talks haven’t matched written text, according to a source close to the talks.


International negotiation expert Matthias Schranner, Founder & CEO of the Schranner Negotiation Institute, offers the following advice on closing a deal effectively:


  1. Applying time pressure is necessary to achieve an agreement – create a sense of urgency.
  2. Time pressure needs to be applied on both sides.
  3. Do NOT combine time-pressure tactics with threats.
  4. At the end of a time-pressure period you need to re-open talks.
  5. This talk should be a “face to face” meeting behind closed doors.