US, China should understand from trade war both prosper, fail together

The trade war of president Trump with China has spread faster and farther than what the world had expected. Orders graph were found running southward graph for factories in both the countries. Apple’s iPhones demand collapsed in China and American farmers are hurt. Chinese central bank had to ease monetary policy due to slower growth and Fed is thinking over normalizing interest rates.

However, the two sides are resuming talks this week with a hope a deal could be struck and standoff could come to an end.

There are several reasons why the economy of China is slowing down and the first thing required by the country is to restore faith in the global trading system. Leaders need to revive private-sector confidence and the supply chains companies need to be preserved which had established on the mainland.

Since 2013 China has been promising to take decisions of bold reforms though hardly they followed it. Lately the state control over economy has been seen increasing and private companies in the country too have been treated same as the state-owned enterprises.

From the recent trade war it is evident both the countries would prosper together and even fail together. More slump in Chinese demand could turn with more hurt to many more US companies apart from just Apple.

Both the sites have agreed to strike a deal before March 1. Let’s hope they are capable of doing so.

Paul Linus