Xi, Trump add confidence to global markets

Analysts remain cautious about way forward to a mutually beneficial trade deal

BEIJING: The resumption of trade talks agreed to by the presidents of China and the United States has injected much-needed confidence into world markets, relieving pressure in a long dispute that has contributed to global economic slowdown.

However, analysts said, pressing the pause button on trade friction between the two countries doesn’t mean the dispute has ended, as tariffs on hundreds of billions of dollars’ worth of goods are still in place and the two sides still have much to negotiate.

During their meeting on Saturday in Osaka, Japan, President Xi Jinping and US President Donald Trump agreed to restart trade negotiations based on equality and mutual respect.

They also set the tone for the world’s two largest economies to jointly advance a China-US relationship featuring coordination, cooperation and stability.

Trump described the 80-minute meeting as “excellent” and “better than expected”, and said that Washington will not add new tariffs on imports from China. He had threatened to apply new duties to $300 billion of Chinese imports.

For now, the leaders’ agreement helps cool the dispute, which had been escalating, and avoid an expansion to a wider range of fields, with the creation of an “economic Iron Curtain”, said Shen Jianguang, vice-president and chief economist at JD Digits, a Chinese financial technology group, in an online posting.

Despite the positive takeaways from the presidents’ meeting, however, some analysts remained cautious about the way forward to a mutually beneficial trade deal. Exactly how the two sides close the gap will be the real test of any trade truce, they said.

Tom Watkins, an adviser to the Detroit Chinese Business Association, said finding sensible, mutually respectful, win-win solutions to the trade dispute will be good for the people of China, the US and the global economy.

Luigi Gambardella, president of ChinaEU, a Brussels-based international association promoting digital cooperation, said a real end to the trade friction will require great effort.

Alan Barrell, director of studies at Cambridge Innovation Academy in London, said the resumption of trade talks between China and the US is excellent news for the world at large. “Trade wars are never won - history proves that,” Barrell said.

This article originally appeared on the China Economic Net 

Published in The Express Tribune, July 2^nd, 2019.

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