G20 meeting has both countries confident that a good-faith trade deal can be finalized soon
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.
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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. Li Xueren / Xinhua |
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.
Cao Desheng, Zhao Huanxin, Cecily Liu and Tang Ying contributed to this story.
(China Daily European Weekly 12/07/2018 page14)