Trade Guys unpack Commerce Secretary Raimondo's visit to China and the G20 Trade Ministers Meeting, discussing mixed messages from China to American businesses, challenges faced by American businesses in China, countermeasures and technology standards, de-risking and its impact on the US economy, and the idea of establishing a permanent home for G20 in New Orleans.
Gina Raimondo's visit to China focused on export controls and attracting US business, highlighting the challenges of IP theft and ambiguous national security laws.
Having a dialogue with China allows for addressing specific grievances and potential outcomes, with a focus on non-sensitive trade areas, while technology controls are expected to tighten.
Deep dives
Gina Romondo's Visit to China and the Main Accomplishments
Gina Romondo's visit to China compared favorably to the earlier visits by Blinken, Yellen, and Kerry. The main accomplishment of all these visits was that they took place without any major confrontations. Romondo had an advantage as the Chinese were interested in discussing export controls and attracting more US business and investment to China, which fell under her portfolio. In contrast, Blinken focused on human rights and other sensitive issues. Romondo highlighted the dilemma that American executives face with continued IP theft and ambiguous national security laws, making Chinese investments "uninvestable." Although some deliverables were not achieved, Romondo established ongoing commercial and export control dialogues with China, which were seen as positive outcomes.
The Importance of Maintaining a Dialogue with China
Having a dialogue with China does not imply surrender, but rather provides an opportunity to address specific grievances and potentially achieve results. Previous dialogues like the Joint Commission on Commerce and Trade and the Security and Economic Dialogue led to some positive outcomes for businesses by addressing their specific problems. Romondo's focus on areas like cosmetics, tourism, and trade without security issues demonstrates the potential for trade in non-sensitive areas. However, technology controls are expected to toughen, with loopholes like cloud services being identified and potentially closed.
Outlook for US-China Relations and the G20 Trade Ministers' Meeting
The outlook for US-China relations regarding trade is likely to remain in a status quo, with limited room for major changes due to political pressures. The Chinese economy's slowdown and the US focus on domestic concerns reduce the urgency for significant trade deals. Technology controls may experience some clarifications and improvements, while expanding control beyond semiconductors remains uncertain. The G20 trade ministers' meeting focused on trade facilitation, WTO reform, and standardization of regulations. The commitment to establishing a well-functioning dispute settlement system and addressing trade barriers through common standards are positive developments.