What to expect from recent US-China trade talks?

During a meeting between US Secretary Janet Yellen in Guangzhou and Beijing, the US and China are anticipated to carry on their conversation on trade and investment. To keep up the dialogue, the two nations established formal economic working groups. Additionally, Yellen’s eating of a meal prepared with hallucinogenic “magic” mushrooms at a Beijing Yunnan-style restaurant ignited a Chinese food fad. But there are still difficult economic concerns dividing the US and China.

Yellen will discuss the status of the global economy, the growing obstacles to Chinese investment in the US, and the Biden administration’s worries about China’s exports of green energy technology at the meeting. She said that instead of wanting to separate their economies, they want to keep trade and investment at the same level.

The surge in exports of clean energy is one of the most divisive topics that has caused rifts between the US and China. Yellen will communicate the serious worries of the Biden administration on China’s exports of massively subsidized green technologies, which are distorting international markets. She contended that China was acting in exactly the same way as when it flooded international markets with cheap, government-subsidized aluminum and steel, damaging American manufacturers who were unable to compete.

Yellen proposed that the United States take steps to guarantee that funds allocated under the Inflation Reduction Act are not undermined by China’s policies. She also discussed giving certain industries tax breaks, without ruling out other potential measures to keep them safe.

It is important to note that both China and the US continue to have serious concerns about the widening economic gap between them. Even though there are encouraging signals, the continuous economic difficulties and tensions will make closing the economic gap more difficult.

Legislation has been approved by the House that will require the Chinese internet company ByteDance to either sell the well-known social media app TikTok or face prohibition in the country. The Senate will likely have a tough time passing the bill because of worries about the potential security danger posed by TikTok’s Chinese ownership. TikTok has come under fire for allegedly stoking the discussion over the House bill by displaying an excessive number of antisemitic and pro-Palestinian content to viewers. Wall Street is buzzing with rumours about who might be interested in purchasing TikTok, and the high asking price is only one of several potential barriers to entry. Prominent American investment firms hold shares in ByteDance, which is coming under increased scrutiny.

China’s officials have not yet responded with a high alert or retaliated against China. Beijing officials, on the other hand, have attacked the bill and essentially reiterated complaints about U.S. policy being unjust to China. China’s faltering economy has been supported by an emphasis on manufacturing production; in January and February of this year, exports increased by 7% over the previous two months. The European Union, which declared last month that it was getting ready to impose duties, or import taxes, on any electric vehicles coming from China, is incensed about the increase in exports.

Tariffs on Chinese goods worth over $300 billion, initially imposed by the Trump administration, have been maintained by the Biden administration and continue to be a major point of contention between the two nations. The potential of lowering some of the tariffs that affect American consumers and enacting new ones that target China’s exports of green energy is being considered by the White House. China has complained to the World Trade Organisation, claiming that the policies of the Biden administration on electric vehicle subsidies are biassed.