Editorial | World awaits right message from talks between Xi and Trump

A truce should pave the way for peace between warring parties by de-escalating hostilities while they try to resolve core issues. But success depends on sincerity and willingness to go the extra mile. It is not unfamiliar territory to China and the United States in their trade war. A previous agreement for a pause in their punitive tit-for-tat tariffs on each other’s exports collapsed, amid mutual recrimination about what had and had not been agreed in pursuit of a peace deal.

Now the two great trading powers are believed to have tentatively agreed to another truce to resume talks. It is expected to be sealed between President Xi Jinping and President Donald Trump on the sidelines of the Group of 20 summit in Osaka, Japan, tomorrow morning. Such is the direct and collateral damage wreaked by the US trade war with China, and the threat it poses to global economic growth if it were to continue to escalate, that the summit of the two leaders overshadows the G20.

As we have reported, details of any truce are expected to be laid out by the two sides in advance. It would avert the threat of American tariffs of up to 25 per cent on an additional US$300 billion of Chinese imports – extending them to virtually all shipments to the US. This is said to have paved the way for the meeting in Osaka.

It follows upbeat comments from US Treasury Secretary Steven Mnuchin, who said a China-US trade deal is “90 per cent” completed. “There is a path to complete this,” he said without specifying what remained to be negotiated. But it can be safely assumed to be the hard part of the negotiations, as it was after the truce agreed following the previous G20 meeting in Buenos Aires in December, which collapsed months later only days before talks were to conclude.

That said, Mnuchin is a moderate among hardline officials on China. He is believed to have been instrumental in holding up action to sanction Chinese officials over the internment of Muslim minorities in Xinjiang because of concern it could disrupt trade negotiations. But this is not the only positive sign from Washington. The White House says a speech by Vice-President Mike Pence in which he was expected to criticise China’s human rights record has been postponed because of “progress in conversations” between the two countries’ leaders. Nonetheless, another source does not rule out a change of heart from Trump, who warned only this week that he was prepared to impose additional tariffs if talks failed.

There is much at stake. This time it is imperative, if the trade war is to end any time soon, that the two sides do not allow the 10 per cent gap between them to kill the whole deal. Serious talks must resume soon. Xi and Trump could send the right message by agreeing to stop the deterioration in bilateral relations.