After Chinese and US chief trade negotiators held phone talks in the evening of November 1, Sino-US economic and trade consultations made important progress. At 1:05 am the next day, a statement issued by China's Ministry of Commerce said that “the two sides had earnest and constructive discussions on properly addressing each other's core concerns, and reached a principled consensus.”
The process of yearlong China-US trade talks shows that the prerequisite for reaching an agreement is “properly addressing each other's core concerns.” China's attitude toward the trade war is very clear: "There is no winner in a trade war." Only those who deliberately turn a blind eye to the close economic and trade ties between countries will care about so-called winning or losing.
On the US side, it has long been clear that the prominent core concern is the amount of agricultural produce purchased by China. For China, the ultimate elimination of all the additional tariffs is its primary core concern, and this concern should be reflected even in a phased agreement.
The levy of additional tariffs is the starting point of the ongoing bilateral trade dispute. Deservedly, the essential condition for reaching an agreement is removing all of them.
Over the past year, China has repeatedly elaborated on this issue in its official statements at different levels and on different occasions. Any miscalculation on this issue could lead to the negotiations going back and forth.
On March 23, 2018, China’s Ministry of Commerce made a very clear statement on US 301 Investigation Decision. “China does not want to fight a trade war, but it is absolutely not afraid of that. We are confident and capable of meeting any challenge.”
What has happened over the past year shows that as long as the US imposes tariffs, China will respond. China will not treat the threat of tariffs as a condition for consultation.
If core concerns cannot be resolved, some issues will remain. If consensus could be reached on core concerns, the process of resolving outstanding issues would be accelerated. If this trend is maintained, the two sides will be closer to a phased agreement.