Using trade deals with Canada, Mexico and South Korea as leverage, Washington looks set to sharpen its hard line trade policy against China and what it deems unfair trade practices from Beijing, strategists told CNBC.
Though some experts have said a tariff-impacted slowdown in Chinese economic activity may make Beijing more willing to agree to a deal, many still maintain China won’t back down and will respond to further U.S. escalation by raising regulatory obstacles to U.S. businesses operating in the mainland.
The United States and Canada reached a last-minute deal on Sunday to replace the North American Free Trade Agreement with the newly named United States-Mexico-Canada Agreement, preserving a $1.2 trillion trade zone that was on the brink of collapse after nearly a quarter century. That followed an earlier deal between U.S. President Donald Trump and South Korean President Moon and the beginning of bilateral trade talks between Washington and Tokyo.
With progress on all those fronts, U.S. Trade Representative Robert Lighthizer can now “turn his total attention to China,” said Deborah Elms, Executive Director at the Asian Trade Centre. “He wants to tackle China. The rest is a distraction on the way to the real show. Now he is in a much better position to focus on China all day and night long. Given the importance of Lighthizer to U.S. trade policy, this is a worrying trend for China.”
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