Donald Trump and Xi Jinping know it’s in their own best interests to end the trade war

With the US facing other foreign policy challenges, Trump cannot afford a protracted trade war that hurts his political base. Meanwhile, Xi has built his reputation on his statesmanship and must preserve China’s most significant bilateral relationship

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US President Donald Trump and Chinese President Xi Jinping leave an event for business leaders at the Great Hall of the People in Beijing on November 9, 2017. Photo: AFP

Cary Huang is a veteran China affairs columnist, having written on this topic since the early 1990s.

Published: 1:00am, 22 May 2019Updated: 1:52am, 22 May 2019

The United States and China have not just been engaged in a trade war, it is also a contest between US President Donald Trump and his Chinese counterpart Xi Jinping, testing their political will, strength and credibility.

When Xi told Trump that China and the US had “a thousand reasons to make the US-China relationship a success, and not a single reason to break it”, at their first summit meeting two years ago, the Communist Party chief might have been trying to emphasise the paramount importance of US-China relations to the two leaders’ own personal interests as well as to that of their countries.

The dramatic events of the past few weeks might suggest the conflict is developing differently than had been anticipated. Trump’s abrupt moves to impose tariffs on virtually all imports from China and to ban Chinese telecoms giant Huawei and its 5G technology might signal the beginning of an end game.

Ultimately, however, the trade negotiations are being driven by the two leaders’ political interests as they are the true chief negotiators of the talks. This is why hope for a trade deal remains alive as long as both leaders continue to talk. There is still optimism that Trump and Xi will meet at the G20 summit in Osaka from June 28 to 29. Their encounter after the G20 meetings in Buenos Aires in December was a big step towards reaching a truce in the trade war and the resumption of talks.

Trump’s frequent claim of friendship with Xi and his praise for Chinese Vice-Premier Liu He, the country’s lead trade negotiator, might imply that a sudden agreement is still possible.

The US has the upper hand, as it was Trump who first initiated and then steadily escalated the tariff war.