Xi and Trump have a meeting of minds, but the hard work starts now
- The trade war is not over and the 90-day truce will allow both sides a chance to iron out their differences
The world has breathed a collective sigh of relief that the United States has, for now, agreed with China not to escalate its trade war. Dinner talks between the countries’ leaders, Xi Jinping and Donald Trump, at the end of the Group of 20 summit in Argentina were friendly, despite threats from the American side before the event began that there was every possibility of tariffs against Chinese goods being increased from 10 to 25 per cent on January 1. Reason has prevailed and a new deadline has been set, easing tensions and enabling negotiations to follow a more rational path. But that does not mean Beijing can now rest easy; the deal struck only buys time and both sides have to make greater effort to find common ground.
Nothing has changed, after all – the trade war, initiated by Trump in July and heightened in September, still rages. The difference is that from the conclusion of Saturday night’s talks, 90 days of space has been created in which to settle the main American complaints about Chinese trade practices. They include forced technology transfer, intellectual property protection, non-tariff barriers and cyber intrusions and theft. All are long-standing issues of contention and the US claims they create an unfair playing field that is behind a hefty trade deficit.
Xi has pledged to more widely open China’s markets and many of the matters raised are allegations, ensuring talks ahead will continue to be rocky. But Beijing is willing to make concessions as proven by the apparent agreement for it to, as the White House said, buy “a very substantial amount of agricultural, energy, industrial and other product” from the US to reduce the imbalance. In what the American side called “a wonderful humanitarian gesture”, Xi agreed to designate the synthetic opioid fentanyl as a controlled substance; China has been accused of not doing enough to halt the flow of drugs and chemicals into the US that are linked to an epidemic of overdose deaths. China also supported efforts for another summit between Trump and North Korean leader Kim Jong-un, while the US promised to uphold the one-China policy on Taiwan.
Xi and Trump had not met for more than a year and given the nature of the trade war and the long-standing issues, their dinner together was not going to make substantial breakthroughs. Threats of a toughening of tariffs remain. But that the discussion went an hour longer than scheduled and ended with a loud round of applause shows a willingness to talk and the positive comments by both sides afterwards is heartening. Foreign Minister Wang Yi said the presidents “reached important common understandings” and the talks charted the course for future relations. That is surely a hopeful sign.