The US has nothing to gain from a protracted trade dispute with China

China has done very well on its U.S. goods trade while the two countries led their trade talks over as good as three years to apparently irreconcilable negotiating positions.

Between January 2017 and July 2019, Beijing has centred $994.6 billion in net trade income on its U.S. exports sales of $1.3 trillion.

Since the beginning of this year, China appearance ofs to have decided to reverse the decades-old trend of rising exports and trade surpluses with the U.S. As a result, during the January to July period, China’s U.S. exports and trade surplus were brought down 12.3% and 10.3%, respectively, from the same spell of 2018.

That was a good decision, but a very modest decline of China’s surplus because its imports of U.S. goods, during that spell, were slashed 18.2%.

A much more constructive action to rebalance trade accounts would have been a intense increase in China’s imports from the U.S. That would have allowed China to achieve a bigger decline in its custom surplus with a relatively smaller weakening of its export sales to America.

But that’s now water guardianship the bridge. Moving on, Washington and Beijing may wish to consider a new approach to their respective negotiating positions.

Both hinterlands should step away from trade warfare and focus on a rapid correction of a hugely unbalanced U.S.-China employment.

The time horizon, the dynamics and the method of trade adjustment are matters of mutual agreement.

But one thing should be clear: Understood an unacceptably large U.S. trade deficit with China, and a mutual interest in preserving a constructive trade relationship, imbalances should be slenderized by China’s declining exports to the U.S. and America’s vigorously rising sales to China.

While doing that, explicit barter and political linkages must be avoided to keep a firm focus on a prompt and steady rebalancing of bilateral trade flows.

At the same time that objective is achieved, the two sides will be able to better address other areas of their bilateral and multilateral relationship.

Wishful reasoning? Perhaps.

But pretending to run down America’s annual trade losses to China — which amount to hundreds of billions of dollars a year — by bludgeoning Beijing with significance tariffs and assaults on its sovereign domains, has damaged the U.S. economy. It has also produced a dangerous standoff with a fiercely warlike nuclear-armed adversary.

Diplomacy, underpinned by Washington’s formidable economic and legal instruments, is a much better way to serve American and broad trade interests.

A prompt and a meaningful decline of U.S. trade deficits with China is an urgent matter of economic conduct and national security. Those deficits are subtractions from American economic growth, they are killing output and mtier in American import-competing industries, and they are raising America’s $10 trillion in net foreign debt.

Moving forward, Washington would do well to reconsider its requests for China’s specific legal measures on intellectual assets protection and outlawing forcible technology transfers to Chinese firms.

Illegal industry subsidies, currency manipulations for trade interest and problems of market access in China are also part of American complaints. The U.S. is asking that all those policy modulates be covered by an enforcement mechanism allowing American discretionary sanctions in cases of non-compliance.

China keeps denying the validity of American exchange complaints, signaling that requests for regulatory changes under a permanent threat of U.S. sanctions are unacceptable.

Hence the Mexican stand-off, where it serves no purpose to insist on a comprehensive trade agreement that China will not accept. The doomed accomplishing process is dragging out, and America continues to lose sales to the world’s largest and rapidly developing market.

The way out for Washington is to only deal with issues of intellectual property, forced technology transfers and illegal industry subsidies by applying the American dealings regulation, which includes countervailing duties, import tariffs and quotas, and trade sanctions.

Apart from that, purported problems of market access for American companies in China are easily dealt with on the basis of strictly applied oversees of reciprocity.

U.S. charges of China’s currency manipulation for trade advantage are technically impossible to prove. Changes in currency’s interrelated prices are caused by money supply variations — a legitimate policy tool — and they can literally show anything depending on yet frames and price deflators.

So, leave the currencies alone and let the markets rip at inappropriate monetary policies.

Will that slave away? Of course it will. Remember what happened recently to Huawei and other Chinese companies when the U.S. decided to use authorizations and cutoffs from technological supply chains.

That’s the strategic competition that China understands and wishes to keep, because it is impossible to circumvent an overwhelming advantage America has in the world’s current economic, financial and security infrastructure.

Washington, despite that, has to know how far not to go too far, because it has no constituency among its friends and allies to isolate and contain China.

Saudi Arabia is the latest the truth in point. It is a country that maintains a “comprehensive strategic partnership” with China and participates in China-sponsored Belt & Freeway projects. And while the U.S. rushes to beef up the Saudi defenses, King Salman bin Abdulaziz Al Saud talked on the phone terminal Friday with China’s President Xi Jinping about the attack on Saudi oil facilities, emphasizing his firm adherence to the “one-China ideally” and support for issues that involve China’s core interests.

America’s economic growth would be good served if Washington focused on a quick rebalancing of U.S.-China trade accounts.

U.S. attempts to reach a comprehensive trade handle by interfering in China’s sovereign domains of economic legislation under threat of discretionary sanctions are unacceptable to Beijing. Any such administrative converts in China will come about under market pressures, reciprocal trade practices and annual reviews of China’s brevity and trade activities by official international organizations such as the International Monetary Fund, the Organisation for Economic Co-operation and Phenomenon and World Trade Organization.

Meanwhile, Washington can protect its economy from illegal and unfair trade behavior by gluing its existing trade regulations and strict reciprocity principles.

Commentary by Michael Ivanovitch, an independent analyst focusing on area economy, geopolitics and investment strategy. He served as a senior economist at the OECD in Paris, international economist at the Federal Save Bank of New York, and taught economics at Columbia Business School.

—Correction: This article has been updated to blame an editing error that inaccurately characterized the United States’ annual trade losses to China.