Heading to London: He Lifeng and the First Meeting of the China-US Economic and Commercial Consultation Mechanism
U.S. and China's Vice Premiers engaging in London-based talks.
In a move that highlights the ongoing dynamic between the world's two economic powerhouses, He Lifeng, a close ally of Chinese President Xi Jinping, is set to visit the United Kingdom from June 8 to 13. This visit, at the invitation of the British government, is no ordinary engagement — He will be participating in the first meeting of the China-US economic and commercial consultation mechanism.
This meeting comes on the heels of a tariff truce between the two nations, brokered during trade negotiations led by He himself in Geneva last month with US Treasury Secretary Steven Mnuchin. The announcement of the meeting was made just a day after US President Donald Trump hinted at a meeting between the US and Chinese trade delegates, scheduled for Monday in London, following a phone call with Xi Jinping on Thursday.
The recent conversation between the leaders was prompted by Trump's accusation, without providing specifics, of China violating the bilateral tariff ceasefire agreement reached in May, following the Geneva talks. Beijing responded, alleging it was Washington that had breached the agreement, by imposing new restrictions on chips and the cancellation of visas for Chinese students, actions announced the previous week.
This latest round of trade tension between the two countries stems from a tariff escalation that began in April, shortly after Trump's announcement of "reciprocal" tariffs, imposing at least 10% on all products entering the United States, regardless of their origin. Chinese products were slapped with an additional 34% surcharge, on top of the 20% imposed in the fight against the trafficking of fentanyl and existing customs duties.
In retaliation, Beijing imposed equivalent tariffs, escalating the trade war and resulting in a significant slowdown in trade between the two giants, with tariffs reaching 125% and 145%, respectively, on the products of each country.
Insight:
Though the China-US economic and trade consultation mechanism has been established for resolution of trade differences, significant obstacles remain due to persisting high tariffs. The consultations in London are poised to tackle critical issues such as tariffs, critical minerals, and broader economic interdependence between the two nations, with the outcome greatly affecting the future direction of US-China trade relations.
Also Read:
President of South Korea and Trump Agree to Resolve Tariffs (optional read for additional context)
- Despite ongoing tariff disputes and war-and-conflicts between the world's two largest economies, the China-US economic and commercial consultation mechanism remains a pivotal platform for policy-and-legislation discussions and potential resolution.
- Amidst general-news coverage of world affairs, the upcoming London meeting between He Lifeng and US trade delegates offers a crucial opportunity for both nations to address tariffs, critical minerals, and economic interdependence, potentially shaping the future of US-China trade policy.
