US President Donald Trump will meet his Chinese counterpart Xi Jinping for a private dinner today amidst the G20 summit
US President Donald Trump will meet his Chinese counterpart Xi Jinping for a private dinner today amidst the G20 summit in Buenos Aires to discuss their ongoing trade war.
While both leaders have expressed optimism that they can reach a temporary agreement, the talks are seen as a last-ditch effort by the Chinese to avoid an increase in US tariffs on $200 billion of Chinese goods from 10% to 25% at the start of 2019. Trump has made it clear that he is also prepared to expand the scope of the tariffs to include all goods imported from China. Both countries’ tariffs have impacted the earnings of agriculture, automotive and consumer goods companies. The IMF has also indicated that such trade posturing may impact global growth for the remainder of 2018 and into 2019.
It is unlikely that either leader will be able to reach an agreement on rolling back the existing tariffs, with their efforts likely to focus on preventing further escalation. But, even with the prospect of an agreement to delay tariff increases, Washington’s continued protectionist stance also makes it possible that the G20 could fail to issue a unanimous communique on the importance of protecting global growth and trade, following a similar outcome at November’s APEC summit. As a result, a temporary truce between the world’s two largest economies is unlikely to ease trade concerns long-term.
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