Trade bracing for clash between US and China at G20
Expectations are low for any breakthrough deals on the China-US trade war at the meeting between Donald Trump and Xi Jinping.
Expectations are low for any breakthrough deals on the China-US trade war at this weekend’s meeting between Donald Trump and Xi Jinping on the sidelines of the G20 meeting in Argentina.
Xi arrives in Buenos Aires after a visit to Spain, with a goal of using the G20 to deliver a circuit breaker for increasing world protectionist pressures, while Trump arrives angry at the news of plant closures and layoffs of 15,000 workers by General Motors and looking for foreign scapegoats for a slowing US economy.
Initial hopes the leaders of the world’s two largest economies could end the trade war escalated by Trump have faded, with the best hopes their meeting tomorrow may provide a framework for cooling tensions.
The meeting takes place with Trump threatening to step up tariffs on foreign carmakers and calling on GM to stop producing cars in China, its biggest market, and warning of further increases in tariffs on Chinese exports from January. Xi is looking to G20 leaders to shift the focus from the unilateral and vitriolic attacks on China by the Trump administration to a multilateral approach to handling trade conflicts.
But expectations are the 10 per cent tariffs on $US200 billion worth of Chinese exports to the US imposed this year could rise to 25 per cent next year, with Trump again threatening this week that he could look at more tariffs on the remaining $267bn of exports.
China is hoping the meeting could play a similar role to the 2009 leaders summit in London that helped produce a global response to the 2008 financial crisis. It has been arguing its economy is continuing to open up to foreign investors and exporters as highlighted by the first import expo in Shanghai early this month, but it appears unlikely Xi will offer the concessions Trump can sell as a win for his domestic constituency.
Speaking in Washington this week, White House chief economics adviser Larry Kudlow said Xi would need to “step up and come up with some new ideas” to break the deadlock on their trade dispute, saying that the US did not “see” the prospect of any such offerings in the weekend bilateral meetings.
China’s Vice Commerce Minister, Wang Shouwen, said this week that the world needed the same unified approach to trade issues as the G20 leaders displayed in London in 2009.
“At a time when global trade is facing challenges from protectionism, we hope the G20 members can take collective actions against unilateralism and protectionism,” he said.
In an article in South America’s largest newspaper, Clarin,this week, Xi called for the G20 to take on a greater role in maintaining the multilateral trading system and promoting globalisation.
He hoped the G20 could continue to take the lead in promoting the long-term governance of global trade.
Foreign Ministry spokesman Geng Shuang said this year’s G20 meeting was being held against the backdrop of a world economy “facing downward risk and pressure impacted by unilateralism and protectionism”.
“China hopes that the mechanism of the G20 summit, on the occasion of its 10th anniversary, will again demonstrate its leading role as a major forum for international co-operation … and inject new impetus for the world economy to embark on a course of robust, sustainable, balanced and inclusive growth,” he said.
This weekend will be the first time the two presidents have met since Trump began stepping up his anti-China trade war earlier this year, with the US President opting not to attend the meeting of APEC leaders in Papua New Guinea two weeks ago.
Bill Bishop, American author of China-focused newsletter Sinocism, raised the possibility of a real humiliation for Xi at the G20 that he would probably use as fuel for more nationalism and calls for self-reliance and anti-Americanism domestically while increasing the rhetoric that Beijing is the responsible upholder of the global trading system.
“It will all come down to what Trump is feeling when he gets in the room with Xi,” he said.
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