Date
16 October 2018
Given the lack of real progress in resolving the North Korea issue, US President Donald Trump may get more mileage by getting tough on the China trade issue. Photo: Reuters
Given the lack of real progress in resolving the North Korea issue, US President Donald Trump may get more mileage by getting tough on the China trade issue. Photo: Reuters

A fruitless summit and an escalating trade conflict

The risk of a global nuclear war has receded considerably following the historic summit between US President Donald Trump and North Korean leader Kim Jong-un.

Yet the Trump administration has been criticized for making too many concessions to Kim, who offered very little during the meeting.

In their joint declaration, Kim agreed to a “complete denuclearization”, but the wording is much weaker than the demand for a “complete, verifiable, irreversible denuclearization of the Korean Peninsula” as the United States had been insisting.

That has raised concerns that North Korea may not fully cooperate when the global community seeks to verify its denuclearization progress in the future.

Also, the joint agreement has offered no clear timetable or roadmap, which many experts view as  key metrics for the success of the summit.

The two sides basically failed to reach any consensus on specific issues. In fact, Kim had already pledged “complete denuclearization” when he and South Korea’s President Moon Jae-in signed the Panmunjom Declaration in April.

Still, Trump said in the press conference after the summit that the United States would suspend joint military drills with South Korea.

Given the lack of real progress in resolving the North Korea issue, Trump may get more mileage by getting tough on the China trade issue.

With the US unemployment rate falling to just 3.8 percent, Trump has the ammunition to pursue his demands.

The US and China edged closer to the brink of a trade war on Friday after the US said it would impose tariffs on US$50 billion of Chinese imports, prompting Beijing to respond with its own tariffs in US goods.

In coming weeks, Investors should brace for more ups and downs amid the heightening US-China trade row.

This article appeared in the Hong Kong Economic Journal on June 15

Translation by Julie Zhu

[Chinese version 中文版]

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RT/CG

Hong Kong Economic Journal columnist

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