The US trade war with China not only slows down the two largest economies, but also harms the rest of the world. Trump and Xi make new calls. Can the world breathe easy?
The US and China have agreed to resume negotiations to settle the trade war. US President Donald Trump reported following his meeting with China’s Party and Party leader Xi Jinping on the sidelines of the G20 summit in Osaka, Japan. Trump spoke of an “excellent meeting”. To kick off the 80-minute conversation, Xi Jinping called for dialogue and cooperation.
The two largest economies have been engaged in a fierce trade war for a year, which has slowed growth in both countries.
“China and the US both benefit from cooperation and lose in a confrontation,” said Xi Jinping. “Cooperation and dialogue are better than tension and confrontation.” He recalled the “ping-pong diplomacy” in establishing relationships. In 1971, ping-pong players from both countries first made contact with each other at the World Championships in Nagoya, 180 kilometers from Osaka, which initiated normalization in relations. Since then, there have been “enormous changes”.
In view of the failure of the negotiations two months ago, the US President said: “We were very close, and then something happened, and it slipped away a bit.” He added. “It would be historical if we could get a fair trade agreement.” The agreed resumption of negotiations will reassure investors and markets worldwide for the time being. However, Trump initially did not say what should now be out of his threatened extension of punitive tariffs.
According to Trump, both presidents had already made some progress during an informal conversation on Friday evening. “Whether we can make a deal, time will tell.” The US President underscored his personal belief that he has “great relationships” with Xi Jinping.
In the trade war, Trump covered around half of China’s imports with 25 percent special tariffs, while China reacted with counter-duties. The room now has Trump’s threat to extend the $ 300 billion special levies on China’s remaining imports if China makes concessions. He thought of tariffs of 10 to 25 percent.
The trade war is slowing growth in both China and the US. The global economy is also being throttled by uncertainty for investors, experts warn. The German export industry and the Chinese companies are already feeling the effects. Thus, the prospects have darkened significantly, especially in recent weeks, reported the German Chamber of Commerce in China.