Process and Mutually Enticing Opportunity as an Explanation for the US-China Trade War Negotiations

Abstract

The US-China trade war lasted for two years, resulting in a volatile environment for multinational businesses and exacerbating already heated Sino-American political tensions. Despite all the uncertainty it produced, the Phase One trade agreement was an economic ceasefire and not a negotiated agreement that resolved core issues in the Sino-American trade relationship. The US-China trade war negotiations failed to yield a successful negotiated agreement addressing core bilateral trade issues largely due to a mutually enticing opportunity to produce a ceasefire rather than address core issues, and process failures. The United States failed to collect information and apply expert advice in the diagnostic stage; both parties failed to establish a negotiation formula; and the US lacked an authoritative spokesperson. This led to a nearly-wasted two years of negotiations, which concluded with the Phase One trade deal declared in January 2020 due to both sides’ perception of a mutually enticing opportunity.