The next two months will prove pivotal in the U.S.-China trade war. The U.S. wants a deal by March 1, or else its last round of tariffs, 10 percent fees on some $200 billion in Chinese imports, will jump to 25 percent. Ahead of the next round of talks expected at the end of this month, there’s some reason for optimism. China has made small moves to reduce the bilateral trade deficit and nibble around the edges of the policy reforms the U.S. has demanded. But as our 2019 forecast predicted, while the two sides may reach a deal on trade by the end of the year, it will be a cosmetic one at best.
Indeed, two months is not nearly enough time for China to make major progress on everything Washington wants (even if Beijing were willing), much less to prove to an exceedingly skeptical U.S. that this time the changes will stick. There’s a growing sense of urgency in each capital to exact concessions from the other, and soon, because both economies are showing more signs of cooling. Neit