US-China trade tensions loom large ahead of G20 Summit

World Today

US-China trade tensions loom large ahead of G20 SummitPhoto from AP

As leaders of the world’s largest economies gather for the G20 summit, in Buenos Aires, the main event may be overshadowed by another meeting just after it ends: the dinner between President Xi and President Trump in which the future direction of the most important trading relationship in the world will be discussed.

The venue has not as yet been disclosed; it will likely be a restaurant here in the Argentine capital.

There is a time pressure for a settlement. 

On January 1, the U.S. – which accuses China of intellectual property violations and unfair trading practices – is due to increase tariffs on $267 billion of Chinese goods, from 10 percent to 25 percent. Already, the U.S. has imposed punitive taxes on China-made steel and aluminum. 

China is making it clear it wants a deal. Cui Tiankai, China’s ambassador to the United States said earlier this week “we in China certainly don’t want to have any trade war with anybody else, certainly not the United States. The key to this solution is a balanced approach to the concerns of both sides.”

Expectations that an agreement might be close were raised after President Xi gave a speech to the Spanish Congress on Wednesday in which he pledged to “sharply widen the door of China’s economy to foreign investors”.

And in Washington, U.S. National Security advisor John Bolton suggested that the beginnings of an agreement were emerging.

“I think it is instructive, and I think that the Chinese side thinks the same, to have the two leaders exchange views in the presence of their senior advisors” he said, saying the meeting could lead to “a kind of way ahead that the advisors could then pursue.”

China does not want the trade issue to entirely dominate the G20 – there are other issues from climate change to the reform of the World Trade Organisation that it is keen to discuss, at the main summit. But the focus will inevitably be on that crucial dinner between the two presidents. 

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