June 19, 2021

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U.S.-China relations will remain tense, says former American ambassador

There will be little progress in the phase one trade deal ahead of the U.S. presidential election in November, former U.S. ambassador to China Max Baucus said on Tuesday.

President Donald Trump signed the partial trade deal with Beijing in January, but the coronavirus pandemic has since hammered China’s economy. There are now doubts if the Asian giant will be able to fulfill its commitments to large purchases agreed to in the deal.

These “odds are diminishing,” said Baucus, who served as ambassador to China from February 2014 to January 2017, under former President Barack Obama’s administration.

According to a forecast by think tank Center for Strategic and International Studies, the pandemic will likely cause China’s purchases of U.S. goods this year to fall way short of what was agreed to in the phase one trade deal.

With Trump preoccupied with securing a second term and China finding it difficult to live up to its end of the deal, there will be few constructive developments until after the election, Baucus told CNBC’s “Squawk Box.”

“There will be a lot of rhetoric back and forth, but I don’t know that there is going to be a lot of substantive, meaningful agreements for change,” he said.

The former ambassador described U.S. and China relations as falling into a “big abyss” and added that more talks are required between the two sides.

Tensions to remain even if Biden wins election

Regarding the upcoming presidential election, Baucus said the U.S. relationship with China could improve if former Vice President Joe Biden wins the election, but tensions will remain.

“It’s probably not going to get worse, maybe it will reach a bottom here,” Baucus said of a Biden win.

It may also get better as Biden is “much more predictable” and is expected to use regular diplomatic channels and practice quiet diplomacy, he explained.

“He knows that to get deals with countries, you have to not criticize them. You can’t force them to dig in their heels publicly, you got to negotiate,” he said.

But there will continue to be signs of tensions between the U.S. and China, with the Asian country now a rising power, he said.

“It does not mean there will not be significant tension between the United States and China. There will be — continue to be — (tensions) even with a Biden presidency,” said Baucus.

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