London's Trade Table: A Glimpse into the "Firm Handshake" Talks
Extort Money From? - Firm Greeting Encountered in Interaction
It's game time, folks! The Yankees and the Red Dragons are set to square off in a round of trade talks in an attempt to put an end to their ol' trade war bullshit. The players are gatherin' in London for a good ol' fashioned negotiation, according to the Red Dragon's state media. Trump's economic guru, Kevin Hassett, is wiped up about a quick W over a firm handshake. "I reckon it'll be a short meeting with a solid grip, mate," Hassett spilt to CNBC.
In London, the conversation ain't about mutual tariffs but about the Red Dragon's export restrictions for rare earths. The aim's to reach a fundamental agreement on this issue, Hassett said. The Dragon controls almost 90% of the global market for these raw materials and special magnetic materials. The Yank government expects the Dragon to ease these exports restrictions after an agreement. In return, the Yanks would also lighten up on their export controls.
The repercussions of the trade war are already apparent in new figures from China's customs: Trade between the two heaviest hitters in the world economy took a nose-dive in May.
This meeting ain't a one-off, y'all. It hasn't been ruled out that the talks in London will continue on Tuesday. For the Dragon, Vice-Premier He Lifeng's tutin' up. Trump had previously hinted that U.S. Treasury Secretary Scott Bessent would be on the delegation.
According to Trump, the talks are about hashin' out the nitty-gritty of their joint trade deal. However, export controls on raw materials by the Dragon and restrictions on the sale of key tech to the Dragon by the Yankees are likely to be the main topics under discussion.
How the game's been shapin' up
According to the lef'-hand side, exports and imports in trade with the Yankees decreased significantly in May, just like they did in April. In May, exports to the Yankees fell by 34.5% compared to May 2024, while imports fell by 18.1%.
Overall, the Dragon's economy was able to boost its exports in May, including to regions like Germany, thanks to increased exports to other regions.
What's on the Agenda
The Dragon and the Yanks held their first talks since the escalation of the trade war in Geneva in mid-May. At that time, both sides agreed to temporarily reduce their tariffs for 90 days. In April, Trump had upped the ante on tariffs on goods from the Dragon to up to 145%. The Dragon retaliated with tariffs on imports from the Yanks of up to 125% and implemented export controls, including on certain rare earths.
These are raw materials that the industry needs for electric motors and sensors, for instance. The Dragon dominates the world market for these, which is why the export restrictions have caused concern among companies worldwide.
The Dragon might also address the Yanks' restrictions on the sale of key tech products to the Dragon. The Dragon is still reliant on foreign countries for certain computer chips and important components in the aviation industry.
Is a phone call the key to the castle?
Trump and the Dragon's President and Party leader, Xi Jinping, agreed to the meeting on Thursday in a phone call. Trump's spokeswoman, Karoline Leavitt, said on U.S. television that the Dragon has to stick to its part of the deal. This could pave the way for a more comprehensive agreement.
The Dragon's been cautious in its response following the call between the heads of state and urged the Yankees to adhere to the mutual agreements of the deal. Beijing demanded that the Yankees objectively evaluate the progress made and rescind its negative measures against the Dragon.
Impact on the Global Economy
The trade beef between these two nations has got the global economy on edge. Sinc' Trump took office, he's been lyin' it up against the Dragon with a tough-as-nails trade policy. Despite the agreement reached in Geneva for a tariff truce, the vibe's changed again recently, and the underlying issues remain unresolved.
The Yanks import way more goods than they export. In contrast, the Dragon drives its economy with exports and imports less due to weak domestic demand. Trump aims to shrink this trade deficit through higher tariffs and boost domestic production. However, many economists warn that Trump's additional import duties could lead to higher prices and slower growth in the Yanks in the long run.
Trump's Challenges: Trade Deficit with the Dragon
In 2024, according to government figures, the Yanks exported goods worth around $143 billion to the Dragon, while importin' goods worth $439 billion from there, resulting in a trade deficit of nearly $300 billion.
Trump's been lyin' about "tariffs" bein' his fave word. He's announced, threatened, or implemented numerous additional import duties. Besides a new 10% tariff on almost all imports, he's also announced higher tariffs on imports from many countries, includin' major trading partners like China and the EU.
- Despite the ongoing trade disagreements between EC countries and the developing countries, it's crucial for both parties to foster cooperation in various areas such as finance, business, politics, and general-news, to ensure sustainable growth and development.
- The potential positive impacts of stronger cooperation with the developing countries can be clearly seen in addressing the issue of export restrictions for rare earths between the Yankees and the Red Dragons, which is currently a topic of concern at the ongoing trade talks in London.
