Peter Lewis: Asia business correspondent discusses Trump’s extension of trade deadline with China

Donald Trump has once again extended the deadline to reach a trade deal with China. 

The deadline that was due to end today has now been pushed back by 3 months. 

Asia Business Correspondent Peter Lewis told Heather duPlessis-Allan that this extension is, ‘kicking the can down the road.’  

He says that the two countries' trade principles are making it harder to find a middle ground.

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Episode Transcript

Speaker 1 (00:00):
And with US. Right now, we have Peter Lewis Asia
Business correspondent Alopiza. Hello, Heada, what do you make of
the fact that Trump has extended the deadline with China again.

Speaker 2 (00:11):
I think it's kicking the can down the road. I
don't think they're making that much progress. Other than what
this kicking of the can does is it reduces the
impact of what would have been exceedingly high tarofts because
there would have been one hundred and forty five percent
tarots on China and China would have had one hundred
and twenty five percent tarists back on the US, So

(00:34):
that would have effectively ended all trade between both countries.
It would have been a trade embargo. But what are
they going to do in this three months? They've been
talking for a long time now, and I think the
problem is the differences between the two sides are really
just too intractable. From the Chinese side, they are ramping

(00:56):
up production in all these industries, causing massive over capacity
and driving prices down, which is affecting companies and industries
around the world, basically putting them either close to extinction
or sending that particular sector into deflation. And then from
the US side, they have this belief that when you

(01:18):
have trade between two countries, there are winners and losers.
It's not a benefit for both sides. If I win,
then you lose. And as long as you have that attitude,
it's very hard to come up with any sort of
trade deal which is mutually beneficial, because as soon you
see benefits from one side, you want to take them away.

(01:39):
So with that sort of mindset and China's mindset of
really this command and controlled economy where they dictate which sectors,
which companies get investments and do well. And also plus
the US concerns over national security that it's high tech
semiconductor's chip making equipment is getting into the hands of

(01:59):
the military. I see it very hard to see how
they're going to make much progress over the next three months,
and we're just going to be in the same position
again come November.

Speaker 1 (02:10):
I feel uncomfortable. I mean, I feel like this is
the kind of idea that we had ditched, but what
seems to have come back. I feel very uncomfortable about it.
In video having to pay the government in the US
a share of its sales in order to be able
to make those sales to China.

Speaker 2 (02:22):
Do you absolutely? I mean, this is unprecedented. You don't
charge companies for getting export licenses, in particular when that
export license gives the company a huge advantage because you
can sell products into the world's largest consumer market, China,

(02:44):
that other companies without those export licenses don't have. So
it's almost like a bride it's saying I will give
you these export licenses, but in return, you had to
pay me fifteen percent of your revenues. It's sort of
like the mafia. It's smacks of extortion. Plus, there is

(03:04):
an issue which I don't think has been resolved, is
under the US constitution, export taxes are illegal. So this
is in effect an export tax. And if these products
that the video is selling to China, or even the
cut down versions, are supposed to be a national security
threat because there's a risk that they will get into

(03:24):
the wrong hands and do enormous damage to the US,
paying fifteen percent of your revenues doesn't get around that flast.
They are still national security threats.

Speaker 1 (03:34):
Yeah, totally.

Speaker 2 (03:35):
Listen.

Speaker 1 (03:35):
Do you think that there's anything that India can do
to repair its relationship with the US.

Speaker 2 (03:41):
I don't think it's trying that hard. At the moment.
I think one it's doing now is it sees a
lot of ground to be made in terms of developing
relationships with other emerging market countries, particularly the bricks So
it's speaking with Brazil about ways in which they can
work together to avoid the impact of the US tarots.

(04:02):
It is driving China and India closer together. The Endramodi
is going to visit China at the end of this
month for security conference. That will be his first visit
to China in eight years. This week next week, China
is sending one e their foreign minister to India. They're
going to discuss their border disputes. They're going to try

(04:25):
and restart cross border trade in the Himalayan regions and
the Ramodi has also invited Vadimir Putin to Delhi, which
is accepted. So at the moment, he is focusing really
on developing these relationships with these bricks countries because I
think he feels really badly let down by the way

(04:46):
in which India has been bullied and been treated by
the US, considering they are supposed to be strategic allies
in the region, and I think it could take quite
a long time to repair that damage because I don't
believe India is going to forgive and forget very quickly.

Speaker 1 (05:04):
No, No, I wouldn't think so. Hey, thank you as always,
Peter will chat to you again next week. Look after yourself.
That's Peter Lewis, our Asia Business correspondent. For more from
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