China-US trade truce brings con­fi­dence

G20 meet­ing has both coun­tries con­fi­dent that a good-faith trade deal can be fi­nal­ized soon

China Daily European Weekly - - China News - By AN­DREW MOODY an­drew­[email protected]­nadaily.com.cn Cao Desh­eng, Zhao Huanxin, Cecily Liu and Tang Ying con­trib­uted to this story.

“Sino-US re­la­tions can­not be about one event. They are about a longterm process. But such a process is made of steps, and the event in Ar­gentina is cer­tainly a step in the right di­rec­tion.” DAVID GOSSET founder of the Europe-China Fo­rum

Pres­i­dent Xi Jin­ping and US Pres­i­dent Don­ald Trump agreed not to im­pose ad­di­tional new tar­iffs when they met af­ter the G20 Lead­ers’ Sum­mit in Buenos Aires on Dec 1.

They reached the con­sen­sus over a work­ing din­ner in what was de­scribed as tak­ing place in “a friendly and can­did at­mos­phere” in the Ar­gen­tine cap­i­tal.

The US had pre­vi­ously sig­naled that in the new year it would in­crease to 25 per­cent the tar­iff rate on $200 bil­lion worth of Chi­nese goods on which 10 per­cent had been levied in Septem­ber. This in­crease will not go ahead now.

The din­ner was the first face-to-face meet­ing be­tween the two men since Trump’s visit to China in Novem­ber last year.

As well as stop­ping the im­po­si­tion of the new tar­iffs, the two lead­ers agreed to con­tinue bi­lat­eral trade ne­go­ti­a­tions.

China also said it would fur­ther open its mar­ket and ex­pand im­ports into the coun­try as part of the fur­ther re­form and open­ing-up of its econ­omy.

Ac­cord­ing to a state­ment re­leased af­ter the meet­ing, Xi said it was cru­cial for the world’s two largest economies to ap­pro­pri­ately man­age dif­fer­ences and find solutions ac­cept­able to all.

In a White House news re­lease, Trump struck a con­fi­dent note and praised Xi.

“This was an amaz­ing and pro­duc­tive meet­ing with un­lim­ited pos­si­bil­i­ties for both the United States and China. It is my great honor to be work­ing with Pres­i­dent Xi,” he said.

A spokesper­son for China’s Min­istry of Com­merce de­scribed the meet­ing as “very suc­cess­ful” in a later state­ment on Dec 5.

“We are con­fi­dent about the im­ple­men­ta­tion (of the con­sen­sus from the meet­ing),” the spokesper­son said.

“In 90 days, eco­nomic and trade teams of both sides will ac­tively push for­ward the con­sul­ta­tion fol­low­ing a clear sched­ule and road map.”

The spokesper­son added that China would start im­ple­ment­ing the spe­cific as­pects of the newly reached con­sen­sus as soon as pos­si­ble.

Zhang Yuyan, di­rec­tor of the In­sti­tute of World Eco­nomics and Pol­i­tics at the Chi­nese Acad­emy of So­cial Sci­ences in Bei­jing, said the out­come sig­naled to the world that the two coun­tries had demon­strated good faith in want­ing to solve problems and man­age any dif­fer­ences.

“It is very good news for ex­port-ori­ented en­ter­prises in China and US as both par­ties agreed not to im­pose new ad­di­tional tar­iffs,” Zhang said in an in­ter­view with Xin­huanet.

Berthold Kuhn, who spe­cial­izes in China and in­ter­na­tional re­la­tions at Free Univer­sity of Ber­lin, said the meet­ing was “a first step” to­ward the set­tle­ment of China-US trade dis­putes. He ac­knowl­edged, how­ever, that more time was needed for ne­go­ti­a­tion. “I am ... slightly op­ti­mistic,” he said. The agree­ment was also wel­comed by the busi­ness com­mu­nity in the US.

My­ron Bril­liant, vice-pres­i­dent for in­ter­na­tional af­fairs at the US Cham­ber of Com­merce, said in a state­ment on Dec 2 that he wel­comed the fact that the two pres­i­dents were “de-es­ca­lat­ing ten­sions and re­turn­ing to the ne­go­ti­at­ing ta­ble”.

“Set­ting aside the im­po­si­tion of tar­iffs is the right course of ac­tion for US work­ers, job cre­ators and the econ­omy,” he added.

Rick Helfen­bein, pres­i­dent and CEO of the Amer­i­can Ap­parel and Footwear As­so­ci­a­tion, based in Wash­ing­ton DC, said the cloth­ing in­dus­try was de­pen­dent on com­plex global sup­ply chains and he wanted the “swift re­moval of the puni­tive tar­iffs” al­ready im­posed by the Trump ad­min­is­tra­tion.

“We will con­tinue to em­pha­size to the ad­min­is­tra­tion the need to stop tax­ing Amer­i­can con­sumers to the detri­ment of our re­tail econ­omy. In that light, we will be watch­ing the ne­go­ti­a­tions closely,” he said in a state­ment re­leased on Dec 2.

US farm­ers, who have been par­tic­u­larly fear­ful of an es­ca­la­tion of ten­sions, also wel­comed the de­vel­op­ment.

“Any sig­nal, even if tem­po­rary, that this trade war may de-es­ca­late is wel­come news for farm­ers,” said An­gela Hof­mann, ex­ec­u­tive di­rec­tor of the Illi­nois-based ad­vo­cacy group Farm­ers for Free Trade.

Jon Taylor, pro­fes­sor of po­lit­i­cal sci­ence at the Univer­sity of St. Thomas in Hous­ton, Texas, said the agree­ment was “the begin­ning of the end of the trade war”.

“The great­est achieve­ments by far were agree­ments in prin­ci­ple to stop any ad­di­tional tar­iffs and to open each other’s mar­kets.”

The out­come was also wel­comed by those out­side the US and China who saw the pos­si­bil­ity of a trade war dam­ag­ing trade around the world.

David Gosset, founder of the Europe-China Fo­rum, set up to pro­mote greater co­op­er­a­tion be­tween Europe and China, says that while the meet­ing was “highly con­struc­tive”, it had to be part of a process.

“Sino-US re­la­tions can­not be about one event. They are about a long-term process. But such a process is made of steps, and the event in Ar­gentina is cer­tainly a step in the right di­rec­tion,” he says.

Osoro Om­boga, an economist and con­sul­tant at Smart­comm Com­mu­ni­ca­tions, a think tank based in Kenya, says a pause in trade hos­til­i­ties was seen as a wel­come de­vel­op­ment in Africa.

He says the con­ti­nent is now very much part of the global sup­ply chain, sup­ply­ing many in­ter­me­di­ate prod­ucts.

LI XUEREN / XIN­HUA

Pres­i­dent Xi Jin­ping meets with his United States coun­ter­part, Don­ald Trump, in Buenos Aires, Ar­gentina, on Dec 1. They had a work­ing din­ner and agreed to main­tain close con­tact.

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