Fold or Double Down in Trade Talks? New York Times

Trade talks between China and the United States have abruptly been put on pause as Chinese President Xi Jinping backed away from previously agreed upon terms that would reform laws constraining US businesses in China. US President Donald Trump and trade representative Robert Lighthizer responded by insisting on their demands, stalemating negotiations that otherwise might have been concluded. While China has demonstrated willingness to protect US intellectual property and permit more market access, the Trump administration wishes to solidify these promises with Chinese laws. Xi, reluctant to give America a public win, must decide China’s next steps, all the more treacherous for his domestic standing as Trump made this dispute highly visible via Twitter. The tightrope marks the fine line between Xi being seen as too soft with the United States or too incompetent to reach a deal that ends tariffs. China’s options described in another New York Times article, include allowing the Chinese currency to depreciate, instigating boycotts, adding bureaucratic measures for US imports, disrupting the global supply chain, or slowing purchase of US treasuries. Any measures could add economic hurt for China just as increased US tariffs force higher prices on US consumers. Xi may bide his time to determine which nation suffers most from Trump’s new round of tariffs. Update: China announced another round of tariffs starting June 1. – YaleGlobal