Signing of the phase one deal at the White House in January

China and the U.S. have confirmed that they plan to implement the phase one trade agreement between the two countries. Chinese Vice Premier Liu He spoke by phone with United States trade officials on May 8, signaling that bilateral cooperation may be continued, while a full-scale decoupling is “really unlikely,” an expert said. In the call between Liu, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, both nations said China and the U.S. should strengthen cooperation in macro-economic and public health fields, and strive to create favorable conditions for implementing the phase-one trade deal that they inked in mid-January. The two parties agreed to maintain communications on key issues, according to a statement released by China’s Ministry of Commerce (MOFCOM). China and the U.S. have not completely resolved all their trade disputes despite the phase-one pact, while the coronavirus outbreak further complicated the issue. Nevertheless, Scott Kennedy, Senior Adviser and Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies in Washington said a full decoupling of the world’s top two economies is “really unlikely”, and an escalation of tensions between China and the U.S. would have additional global effects during and after the pandemic.

China has remained committed to the phase-one deal, which would enhance cooperation and remove destabilizing factors. In the first four months, China imported CNY256.18 billion in U.S. goods, down 3% on a yearly basis, but less than the 3.2% drop in the nation’s overall imports, the China Daily reports. The planned phone call was the first conversation about the agreement between the two countries’ chief negotiators since it was signed in January. It came after U.S. President Donald Trump threatened to “terminate” the trade deal if China fails in its promise to purchase specific goods and services from the U.S. China’s trade with the U.S. continued to drop from January to April amid the Covid-19 pandemic, with the total value of China-U.S. trade down 12.8% to CNY958.46 billion. China’s exports to the U.S. have plunged 15.9% in the first four months, according to the Global Times.

China said tariffs should not be used as a weapon, after U.S. President Donald Trump threatened to impose more for China’s handling of the coronavirus. Tariffs, in general, hurt all parties involved, Chinese Foreign Ministry Spokeswoman Hua Chunying told reporters at a daily briefing. “So the United States should stop thinking it can use tariffs as a weapon and a big stick to coerce other countries,” she said. Trump said that raising tariffs on China was “certainly an option” as he considers ways to respond to the coronavirus pandemic. The U.S. President claims that the virus originated in a Wuhan lab and therefore China should be held responsible for the pandemic. The scientific consensus is that the virus evolved from nature, jumping from an animal reservoir to humans. Hua urged the United States not to try to divert attention from its own mismanagement of its coronavirus epidemic by shifting blame onto China. “Saving lives should take precedence over political self-interest,” she added. Hua maintained that China had taken swift action such as notifying the World Health Organization (WHO) and countries including the United States as early as January 3 about the coronavirus. She said accusations that China deliberately spread the virus were baseless. Moreover, mounting scientific evidence is suggesting Covid-19 may have surfaced earlier than reported in countries beyond China.

“U.S. President Donald Trump, who is overseeing one of the worst public health crises in U.S. history and facing a tough reelection battle, has no leverage to wage another trade war with China and any attempt to pressure Beijing into making more concessions will likely prompt forceful countermeasures,” the Global Times wrote. Trump is seemingly threatening to terminate the China-U.S. phase one trade agreement, a move that could end a truce and reignite the multi-year trade war between the world’s two biggest economies, Chinese trade experts noted. Trump said he was “very torn” on how to deal with the phase one trade agreement. “I have not decided yet,” the U.S. President told Fox News, when asked about the fate of the deal. The comment came just hours after his own trade officials said, following a phone call with Chinese Vice Premier Liu He, that “good progress” had been made on the agreement’s implementation. Chinese experts warned that the Chinese government may reconsider its position on bilateral trade relations amid the escalating war of words.

Chinese Ambassador to the United States Cui Tiankai in an op-ed article published in the Washington Post also called for an end to the blame game and urged the two countries to rebuild trust and focus on the Covid-19 pandemic. He also lambasted “the absurd mindset of ‘always blame China’”. In another sign of worsening U.S.-China relations, the U.S. government tightened visa regulations for Chinese journalists in the U.S., limiting their stay to 90 days, with the option of an extension. The move will likely elicit countermeasures from China.

China has scaled up control measures along its land borders against possible importation of coronavirus infections as the pandemic in neighboring countries is escalating rapidly, especially in Russia. Several border regions have stepped up construction of biosafety laboratories and nucleic acid testing facilities and expanded epidemic prevention and control teams to effectively improve their ability to cope with outbreaks. China had registered 1,680 imported infections as of May 7. There are still 260 patients hospitalized, of whom 219 are imported cases.

In China, three inactivated vaccines and a recombinant one have been put into clinical trials, and three of them have entered the second phase, including an inactivated vaccine developed by Sinovac Biotech, a Beijing-based company.

China’s Foreign Ministry said that China stands ready to continue close cooperation with the World Health Organization (WHO) to find the origin of the coronavirus that causes Covid-19, but it firmly opposes any political manipulation under the guise of an investigation of its origin.