China Briefing | US-China trade war: if Trump and Xi agree ‘grandaddy’ of trade deals, here’s what comes next

A trade pact with Washington could help Beijing transform its economy and take the reins on the world stage. And then?

Reforming the World Trade Organisation, joining the new trans-pacific partnership, free-trade with Japan and Korea and schmoozing Europe should be high on the agenda

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An end to the US-China trade war may be in sight. Photo: AFP

Published: 9:30am, 13 Apr 2019Updated: 8:14pm, 16 Apr 2019

After more than a year of tussling, Beijing and Washington “are rounding the turn” to achieve “the grandaddy of all” trade deals in the coming weeks, to borrow US President Donald Trump’s interesting turn of phrase.

To be sure, fretting that the deal could stall or collapse at the last minute is still valid partly because of Trump’s wilful unpredictability, but the deal is more likely to happen than not.

If anyone is looking for any fresh sign of confirmation, Trump gave one last week when he took another swing at the European Union and threatened to impose tariffs on US$11 billion worth of European imports over a long-running aircraft subsidy dispute. This appears to fit a pattern: he is confident of settling one trade fight, so he will start another one.

Readers of this column should know that this writer, for quite some time, has been assuming there will be a satisfactory conclusion to the US-China trade talks, primarily because the stakes are too high and the interests of both countries have become too deeply entwined over decades for Trump and his inner group of China hawks to pick them apart in just months.

A more intriguing question is that after the conclusion of the deal, what should China do next?