16:30 GMT24 November 2020
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    As trade negotiations between the US and China continue on shaky ground, the chances of Washington walking away from the table with a "balanced" deal are pretty slim, Steve Keen, author of "Debunking Economics," told Sputnik.

    "[The US] is trying to achieve balanced trade with the most competitive market on the planet," Keen told Radio Sputnik's Loud & Clear on Friday.

    "It ain't gonna happen."

    ​Both countries have been engaged in a game of tit-for-tat for the last several months since June 2018, when the Trump administration opted to impose a 25% tariff on some $50 billion worth of Chinese goods in an attempt to level the US-Chinese trade deficit.

    Most recently, the administration increased existing import tariffs of 10% on some $200 billion worth of Chinese goods to 25% on Friday. The new increase will affect some 6,000 products, including seafood, fruits, rice, oats, honey, beer, wine, copper, aluminum, natural gas, paints and steam turbine parts, among other items.

    In response, Beijing stated that it "deeply regrets" the US' move, but that it will retaliate and take "necessary countermeasures."

    Keen told host John Kiriakou that the ongoing disagreement between the US and China is partially rooted in both countries exploiting loopholes in US tariff laws.

    "It's completely undercut American manufacturing, and American manufacturing is now no longer able to compete with the likes of China, Japan, Korea, Germany and so on," he said, before explaining that the US' habit of overvaluing its currency is also contributing to trade hardships.

    "At the same time one of the reasons for that is a massively overvalued exchange rate because of the international reserve currency — another mistake of American policy going back to the [July 1944] Bretton Woods Agreement."

    Keen noted that China has tried to undervalue its currency for quite some time "for a competitive advantage, and all countries do try to manipulate their currency. And, of course, if you run a trade circle, which China is doing, or if you're the global reserve currency, which America is, then you do have the capability to buy and sell your currency on the international exchange rates and push its value in the direction you want, to some extent," Keen continued.

    "But the thing about America is everybody needs American dollars for trade, whether or not they want to buy American goods. And that means the portfolio demands for American dollars is far higher than the portfolio demands for any other currency."

    In the end, Keen told Kiriakou that the trade dispute will eventually conclude with "an increase in prices, but not as big as people are expecting."

    The next round of trade talks between to the US and China is expected to resume next week in Beijing. On Friday, US President Trump ordered that US Trade Represenataive Robert Lighthizer to begin preparations to impose tariffs on approximately $300 billion worth of imported goods from China. Further details regarding the matter are expected to be released on Monday, May 13.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.


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