In an interview with John Micklethwait, Bloomberg’s Editor-in-Chief, at the New Economy Forum in Singapore, Singapore’s Prime Minister Lee Hsien Loong said that while the trade issues between the two biggest economies in the world are “genuine,” the two countries should not allow tensions to affect other aspects of their relationship.
The Prime Minister told Micklethwait that global trade issues must be dealt with, otherwise, the world is at risk that bigger conflicts could ensue. He said, “Both sides must want to reach a deal and then it can be worked out,” and added that while resolutions were reportedly nearly reached several times, they always failed at the highest level.
Bloomberg Media Group, a division of Bloomberg LP, organized the New Economy Forum.
PM Lee also said, “The leaders of the two countries have to decide what they want to do, and if it cannot be worked out, then I think you really want to keep it from boiling over, respond in a restrained way and try to keep things going and prevent this from poisoning the overall relationship. Because even between America and China, there are so many things where you have to work together, otherwise you are not going to get anywhere, starting with North Korea.”
The United States’ tariffs on $250 billion of Chinese goods drew retaliatory moves from Beijing and have affected other issues as well, including human rights and support for Taiwan from the US military.
US President Trump has hinted that the two nations may come to an agreement when he meets with Xi Jinping, the President of China, in the next few weeks. However, China and the US maintain widely diverse stands concerning market access and state support for government-run businesses.
Wang Qishan, the Vice President of China, assured the audience at the New Economy Forum of China’s commitment and readiness to come to the table to find answers to solve trade tensions with the United States. However, Wang said that China would not be “bullied and oppressed by imperialist powers” again, strengthening the fears of business and political leaders present that increasing nationalism in the two nations would complicate the situation.
President Trump spoke on the phone with President Xi last week, for the first time in half a year. However, just this Monday, the US President said he was uncertain of the outcome of the trade war.
Prime Minister Lee said that the trade deficit is only one part of macroeconomic problems. “The trade deficit is on Mr. Trump’s mind but the economists will tell you that trade deficit is a manifestation of macroeconomic problems and not a matter of trade restraints or lack of trade openness. That has to be dealt with separately.”
Micklethwait’s interview of Prime Minister Lee can be found here.
China has not been the only target of additional tariffs from the US, with President Trump mentioning levies on car manufacturers from Europe and threatening to leave the World Trade Organization, which he deemed “unfair,” as well as talking about implementing levies on all imports from China.