Opinion | Geneva deal can’t hide fact US-China trade war has no end in sight

High-level trade talks between China and the United States in Geneva, Switzerland, last month resulted in the suspension of most of the tariffs on each other. Despite that, a substantial amount of tariffs remains. While a 24 per cent duty was suspended for 90 days, both sides kept a 10 per cent tariff in place. In addition, the US retained a 20 per cent tariff imposed over what the Trump administration says is China’s role in the fentanyl crisis.

Trump seeks to extract maximum economic benefit from US trading partners. He has pressured Japan and South Korea to invest in a natural gas pipeline in Alaska, demanded British market access for American beef and made a series of demands on Vietnam, including insisting it remove its tariffs on US imports in exchange for tariff concessions. Trump will undoubtedly try to secure as many lucrative business deals as he can from China.

His handling of trade negotiations will also be determined by the impact of his China tariffs on the US economy and his voter base. Expect him to watch market dynamics closely as midterm elections approach next year. Rising consumer prices and falling economic growth in the US in the next few months could push him to show more flexibility.

Most importantly, geopolitical calculus will shape Trump’s approach to China, which he sees as the main adversary of the US and so must be contained. For this reason, his administration has continued to attack China despite the agreement reached in Geneva, warning before the ink was dry that using advanced Huawei chips “anywhere in the world” would violate US export controls.

The US has suspended the sales of some technologies linked to jet engines, including those related to the state-owned Commercial Aircraft Corporation of China. It is also trying to use negotiations on “reciprocal” tariffs to remove China from important supply chains.