Logo

Logo

Trade truce

Washington’s economic reprisal against Beijing has merely been staved off.

Trade truce

Aside from the multilateral signal of intent on matters economic, quite the most critical feature of the G20 meeting in Buenos Aires was the “trade truce” between China and the United States of America. Donald Trump being Donald Trump, there is little that can be taken for granted in international relations, not least the dominant issue of climate change.

On closer reflection, Washington’s economic reprisal against Beijing has merely been staved off. Nonetheless, it might be comforting to China that President Trump will wait for 90 days before imposing the threatened 25 per cent tariffs on most Chinese imports, pending negotiations.

Arguably as quid pro quo, President Xi Jinping is said to have offered certain concessions, notably to stop Chinese exports to the US of fentanyl, and the death sentence for convicted traffickers. Beyond the import-export construct, China’s response does have a bearing on human rights.

Advertisement

In what has been regarded as a “wonderful humanitarian gesture”, President Xi has agreed to designate fentanyl as a controlled substance, implying that people selling fentanyl to the United States will be subject to China’s maximum penalty under the law. Buenos Aires is a long way from both Beijing and Washington and not merely in terms of distance. As it turns out, the halfway house has been reached in the Argentine capital.

It is hard not to wonder whether there has been a measure of comedown on the part of Mr Trump, who has of late indulged in a bout of muscle-flexing vis-a-vis China. He did sound remarkably confident after the dinner with the Chinese delegation ~ “It was an amazing and productive meeting with unlimited possibilities for both the United States and China”.

Both leaders and the countries that had assembled at the G20 meeting are acutely aware that further progress will hinge on the followthrough by either country. For now, President Trump will not follow through his threat to raise tariffs on $200 billion worth of Chinese goods from 10 per cent to 25 per cent in the new year.

It bears recall that he had described his threat as a reprisal for a long history of unfair Chinese trade practices. There were widespread concerns that such a large hike in tariffs could trigger a serious trade war between the two countries, with devastating results for the global economy. It is fervently to be hoped that both countries will hold their fire, and strive for forward movement beyond the exchange of pleasantries at the dinner table.

For once, the two Presidents have agreed to agree, specifically to “get bilateral relations right”. China is willing to increase imports in accord with the needs of its domestic market and the people’s needs, including marketable products from the United States, to gradually ease the imbalance in two-way trade. The forward movement, however tentative, is unmistakable. The development affords breathing space to the giants of international economics and trade history.

Advertisement