U.S and China need each other for global peace and economic growth 

By Gerald Mbanda 

The recent trade talks between China and U.S held in Geneva, is testimony that the two world largest economies and super powers need each other for global peace and economic growth. Tensions between the two countries have gone down signaling a renewed commitment to economic cooperation. Chinese officials have always maintained that trade wars are a zero sum game because there is no winner. 

U.S and China agreed to scale down tariffs where the U.S agreed to reduce its tariffs on Chinese goods from 145% to 30% for a 90-day period. In a reciprocal move, China lowered its tariffs on U.S. products from 125% to 10%. This pause in the trade war offers relief to industries and consumers alike, mitigating the risk of a major recession and fostering a more stable economic environment.

The trade agreement highlights the deep interdependence between the U.S. and China.American companies, such as Apple, rely heavily on Chinese manufacturing, with approximately 80% of their key suppliers based in China. Conversely, Chinese firms have invested over $144 billion in the United States, directly creating more than 230,000 jobs. This mutual dependence underscores the importance of maintaining strong economic ties for the prosperity of both nations.

The global supply chain is a complex web that connects industries across continents. China plays a central role in this network, providing critical components and manufacturing capabilities that are integral to various industries worldwide. For instance, over 92% of global anode material for batteries is produced in China. Disruptions in China’s supply chain can have far-reaching consequences, affecting industries from electronics to automotive manufacturing.

The economic policies of the U.S. and China have a profound impact on the global economy. Trade tensions between the two countries can lead to increased tariffs, higher consumer prices, and disrupted supply chains, affecting economies worldwide. Conversely, cooperation between the U.S. and China can lead to reduced tariffs, lower consumer prices, and more stable global supply chains, benefiting economies around the globe.

The recent tariff reductions are a step toward restoring stability and predictability in international trade. By working together, the U.S. and China can address global challenges such as climate change, public health crises, and economic inequality, contributing to a more peaceful and prosperous world.

The Chinese business companies dealing in exporters, technology, and manufacturers said they were happy as American high tariffs had become a structural impediment to innovation and expansion. With export-driven provinces like Guangdong and Zhejiang experiencing downward pressure, the trade deal is seen as a bridge to revive foreign demand.

The agreement between the U.S. and China to reduce tariffs is a testament to the importance of their economic partnership. It reflects a shared recognition of their mutual dependence and the necessity of collaboration for global peace and economic growth. As the world navigates complex challenges, the U.S. and China must continue to work together, fostering cooperation and understanding to build a more stable and prosperous global community.