Trump, meeting China’s Xi, voices hope for progress on trade dispute

BUENOS AIRES, (Reuters) - U.S. President Donald Trump told Chinese President Xi Jinping yesterday he hoped they would achieve “something great” on trade for both countries as they opened a high-stakes summit aimed at defusing a damaging tariffs war between Washington and Beijing.

With the United States and China locked in an economic dispute that has unnerved global financial markets and weighed on the world economy, Trump and Xi sat down with their aides for a working dinner at the end of a two-day gathering of world leaders in Buenos Aires.

Their closely watched meeting came shortly after the Group of 20 industrialised nations backed an overhaul of the global body that regulates international trade disputes, marking a victory for Trump, a sharp critic of the organisation.

Trump struck a positive note as he sat across from Xi, despite the U.S. president’s earlier threats to impose new tariffs on Chinese imports.

“We’ll be discussing trade and I think at some point we are going to end up doing something great for China and great for the United States,” Trump said when a small pool of reporters was briefly allowed into the room.

He suggested that the “incredible relationship” he and Xi had established would be “the very primary reason” they could make progress on trade, though he offered no specifics on how they might resolve the main issue dividing their countries.

Xi told Trump that only through cooperation could the United States and China serve the interest of peace and prosperity. The world’s two biggest economies have also increasingly been at odds over security in the Asia-Pacific region.

At the same time, Trump again raised with Xi his concern about the synthetic opioid fentanyl being sent from China to the United States, urging the Chinese leader to place it in a “restricted category” of drugs that would criminalise it.

Earlier yesterday, the leaders of all the world’s top economies called for reforms to the crisis-stricken World Trade Organization in a final statement from their summit.

Officials expressed relief that agreement on the summit communique was reached after negotiators worked through the night to overcome differences over language on climate change.

The final text recognised trade as an important engine of global growth but made only a passing reference to “the current trade issues,” after the U.S. delegation won a battle to keep any mention of protectionism out of the statement.

In addition to tariffs on Chinese goods, Trump has imposed tariffs on steel and aluminums imports into the United States this year. Numerous countries have filed litigation at the WTO to contest the levies.

The United States is unhappy with what it says is the WTO’s failure to hold Beijing to account for not opening up its economy as envisioned when China joined the body in 2001. The European Union is also pushing for sweeping changes to how the WTO operates.

“Notwithstanding our differences, we have been able to agree a path forward at the G20,” French President Emanuel Macron told a news conference. “The United States has endorsed a clear multilateralist text.”

G20 delegates said negotiations on the final summit statement proceeded more smoothly than at a meeting of Asian leaders two weeks ago, where disagreements on protectionism and unfair trading practices prevented a consensus.

European officials said a reference to refugees and migration - a sensitive issue for Trump’s administration was excised to ensure consensus.

On climate change, the United States once again marked its differences with the rest of the G20 by reiterating in the statement its decision to withdraw from the Paris Agreement and its commitment to using all kinds of energy sources.

The other members of the group reaffirmed their commitment to implement the Paris deal and tackle climate change, taking into account their national circumstances and relative capabilities. Indebted International Monetary Fund Managing Director Christine Lagarde said high levels of debt accumulated by emerging market nations was a pressing concern.

“There is an urgent need to de-escalate trade tensions, reverse recent tariff increases, and modernise the rulesbased multilateral trade system,” she said.

U.S. officials said a call by G20 leaders for the IMF and World Bank to improve monitoring debt levels was aimed at ensuring that developing economies did not become too heavily indebted to China in return for infrastructure projects.