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Pettis Warns of Structural Barriers in US-China Trade Rebalancing Efforts

Michael Pettis, a senior fellow at the Carnegie Endowment for International Peace, discussed challenges facing efforts to correct global trade imbalances ahead of planned discussions between US and Chinese leadership. Pettis cautioned that structural economic challenges complicate straightforward solutions to bilateral trade disparities. He emphasized that rebalancing trade relationships requires addressing underlying economic fundamentals rather than relying on tariff adjustments alone. Pettis's assessment suggests policymakers on both sides must confront issues within their respective economies to achieve sustainable equilibrium. His outlook underscores the complexity of normalizing trade flows between the world's two largest economies, pointing to the need for economic reforms beyond conventional negotiating approaches.