The United Arab Emirates is not alone in its concerns about the “hostile confrontation” between the United States and China, the Gulf country’s foreign minister of state told CNBC on Wednesday.
“Every time we see a confrontation between Washington and Beijing, the markets really shake,” Anwar Gargash told CNBC’s Hadley Gamble in Abu Dhabi.
“And I would clearly say that the competition between these two giants will continue, and to a certain extent, it will be natural. But I think we are interested in this competition being more nuanced and, at the same time, doing so. Not shaking up what is already a system very weak international. “
The conversation, covering geopolitics, the global economy and the fight against coronavirus, took place in the context of continuing tensions between the world’s two largest economies. President Donald Trump’s administration blamed China for the spread of the coronavirus, which Beijing strongly rejected.
As the United States nears its presidential elections in November, and Washington’s anti-Chinese rhetoric grows stronger, the carefully negotiated trade deal between the two powers is at stake.
Just Monday, US futures. USA They fell on the back of a Fox News report that quoted White House trade adviser Peter Navarro saying the China trade deal had “ended.” Navarro later denied making the statement, saying his words were taken out of context, adding that the phase one trade agreement remains intact. The markets recovered their losses on that news.
“He was just talking about the lack of confidence we now have in the Chinese Communist Party after they lied about the origins of the China virus and imposed a pandemic on the world,” Navarro said in a statement that day, noting that while trade the deal cannot be broken, trust can.
Later Monday, Trump tweeted: “The China Trade Agreement is completely intact. Hopefully they will continue to abide by the terms of the Agreement!”
The precarious state of relations between the United States and China remains a matter of concern for the UAE, which has strong ties to both countries: a long-standing diplomatic and military alliance with the United States, as well as a growing economic relationship with China, which in 2016 became the world’s leading investor in the Middle East.
Trade between the United States and China is of great importance to the global economy, from international supply chains and economic growth to the costs of basic goods.
“I would say that the UAE’s concern about this hostile confrontation is a global concern. And we are not alone here,” Gargash said.
“Almost everyone has enormous financial, investment, and trade relationships with China. Like many countries in the world, we all recognize that the United States has the largest network of allies in the world and consider ourselves an important ally of the United States.” . We clearly see this confrontation and we are concerned. We would like to see a more cooperative relationship between Washington and Beijing. ”
But the minister was sober about the challenges ahead.
“We will have to balance and manage, and it is very difficult. I would say that at the moment, perhaps we are managing, like many other countries, but increasingly, we look at that and we see that this will be a major problem.”
Economists do not see the United States and China reaching the second phase of the trade deal anytime soon, and have warned that continued tensions and tariff threats could hinder the much-needed economic recovery from coronavirus closures.
The first phase of the agreement was signed in January, stopping the trade war that it had been waging for more than a year. But even that could fall apart if relations deteriorate in the coming months, experts warned.
Gargash is well aware of this and its potential impact on the UAE, which enjoys strong trade relations with both countries and whose currency is pegged to the US dollar.
“This is a balancing act that most countries in the world have to deal with,” he said. “And we hope that there will be some stability in this very important relationship between Washington and Beijing.”
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