The U.S. and China have been in negotiations for months now to end the trade war between the two countries. It began when the U.S. raised tariffs on a handful of Chinese products, including steel. China responded in kind, and both countries have lost billions of dollars as a result. Economists say that tariffs are a no-win proposition- both sides are hurt in a trade war.
Both sides have been calling the new talks promising, however, and both sides seem optimistic. But other issues threaten to derail the talks. The newest is a dispute over islands in the South China Sea, an argument that is always at a low boil, with occasional bouts of over-heating.
The basic idea is this: there are a number of tiny islands in the South China Sea that have long been mostly uninhabited. That is, until they became strategically important. International maritime law establishes a country’s ownership of the ocean as being a certain distance away from its land. If China can successfully claim these islands, it would extend its influence significantly into the ocean, including along major trade routes and militarily significant waterways. The U.S., already nervous about China’s growing power in Asia, doesn’t want to see this happen. Nor does the U.S.’s ally Japan, which also has a claim on the islands. (The Philippines had also had a claim on the islands but gave it up for closer relations with China.)
Well, this week the U.S. sent a couple of ships sailing near the islands claimed by China, as it does periodically. The timing may not have been great, however. It’s customary in international relations to keep trade talks and other disputes and negotiations separate, but sometimes that’s more easily said than done. If someone is threatening what you believe is your territory, it might be difficult to agree to pay them more for the movies they produce.
But the dispute over the islands is nothing new. Negotiating an end to a trade war with your largest trading partner- that’s what’s new.
