In response to remarks made by US President Donald Trump regarding a potential trade agreement with China, the Chinese Foreign Ministry stated that the United States cannot simultaneously express a desire for a deal while applying undue pressure. The Ministry further asserted that this approach is neither appropriate nor viable. China advocates for dialogue with the US based on principles of equality and mutual benefit, and maintains ongoing communication with all relevant parties regarding tariff-related matters. Despite these comments, the AUD/USD pair experienced a 0.63% increase, trading at 0.6415 at the time of reporting.
The US-China trade conflict, initiated in 2018 with the imposition of trade barriers by the US citing unfair trade practices and intellectual property theft, has involved retaliatory tariffs from China on US goods. A Phase One trade deal was signed in January 2020, aiming to address structural reforms and restore stability. However, the COVID-19 pandemic shifted focus. President Biden has maintained existing tariffs and introduced additional levies.
The potential return of Donald Trump to the US presidency has raised concerns about renewed trade tensions. Trump’s campaign pledge to impose significant tariffs on Chinese goods upon his return to office suggests a resumption of the trade war, potentially impacting global supply chains, investment, and consumer price inflation.
