Photo/Illutration U.S. Trade Representative Jamieson Greer, left, and U.S. Secretary of the Treasury Scott Bessent take part in a news conference after two days of closed-door discussions on trade between the United States and China, in Geneva, Switzerland,on May 12. (Keystone via AP)

The serious confrontation between the United States and China entailing a series of retaliatory high tariffs has finally abated.

After two days of ministerial-level discussions in Geneva, Washington and Beijing agreed to mutually reduce tariffs by 115 percent over a 90-day period and to push forward with talks on their economic and trade relationship.

We welcome the compromises made by both sides because of the grave concerns about the enormous effects on the global economy as the world’s two largest economies damaged each other.

As a result of the high tariffs, forecasts had been made that daily necessities for which the United States depends on Chinese-made products would increase in price or face shortages.

The Trump administration could no longer ignore the criticism that began to be raised domestically.

For China’s part, exports to the United States in April had already decreased by 20 percent compared to April 2024.

Light manufacturing companies faced the risk of bankruptcy and President Xi Jinping’s administration was forced to respond.

Companies of the two nations are not the only ones involved in U.S.-China trade. Their confrontation had a negative effect on the economies of many nations, including Japan.

In a global economy forecast released in April by the International Monetary Fund, it revised downward its global 2025 economic growth rate estimate from 3.3 percent to 2.8 percent due to a projected worsening of trade frictions caused by the Trump tariffs.

Amid the globalization of the economy after the end of the Cold War, China became increasingly competitive in the manufacturing sector.

On the other hand, as manufacturing in the United States declined, information technology-related companies such as Google became more important.

While that has led to a trade deficit for the United States and a trade surplus for China, that is only the accumulated result of choices made by companies in the two nations.

The economies of the two nations are in a complementary relationship rather than one of confrontation.

For example, the U.S. head office profits from the design of the iPhone, while plants in China work on final assembly of the device.

Of course, that does not mean there were no problems.

U.S. workers in the declining manufacturing sector were unable to smoothly find jobs in other sectors.

It has been many years since the first indications were made about China’s excess production capability. On the other hand, China’s domestic consumption has been weak.

The two nations face large domestic income disparities.

This issue is not limited to just U.S.-China trade. And it is also not an issue that will be resolved through maintenance of the free trading structure.

The link between the economic structures of the United States and China and how income is distributed in both nations should be recognized as the core factor of this issue.

Rather than spend more time on trade discussions, the path ahead should instead be one in which both nations sincerely address the various domestic issues they must tackle.

--The Asahi Shimbun, May 13

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