By Prarthana Mitra
In what is being described as a “highly successful meeting”, US President Donald Trump met his Chinese counterpart Xi Jinping on Sunday during the G20 summit, agreeing to stall additional tariffs in a bid to de-escalate the ongoing trade war.
Pause button
The Chinese Premier was invited for dinner by Trump in Buenos Aires on December 1, where they met for the first time since last November. In an official statement after the dinner, the White House said that the US would leave existing tariffs on $200 billion worth of Chinese goods at 10%, and refrain from raising that rate to 25% from January 1, as was previously planned.
According to the Chinese statement, the two heads of state conducted two-and-a-half-hour in-depth exchanges to reach important consensus that could determine the direction for Sino-US relations in the coming period.
The two sides proposed a series of constructive plans on how to properly resolve existing differences and problems, including opening the market to each other. China is willing to expand US imports according to the needs of the domestic market and the people and gradually ease the trade imbalance.
According to the US, the Chinese have agreed to buy a not yet agreed upon, but very substantial amount of agricultural, energy, industrial that would help reduce Americas huge trade deficit with China.
In a long-sought concession to the US, China reportedly agreed to label fentanyl (synthetic opioid responsible for thousands of annual drug deaths) as a controlled substance. People selling it to the US will soon be subject to the maximum penalty under Chinese law.
Disparity in statements
US Secretary of the Tresury Steven Mnuchin warned China against going soft on trade agreements even as the two countried don’t actually appear to be on the same page, as per analyses of official statements made during the summit.
According to economic forecaster Christophe Barraud, the two nations emphasised different results highlighting how much of a gap needs to be overcome over the next 3 months. In fact, the ninety-day deadline finds no mention in the statement released by Chinese Finance Minister Wang Yi.
Further, the issue of intellectual property theft that China has been accused of, hasn’t been addressed according to the minutiae released by Wang. The US media, meanwhile, has confidently reported that both leaders summarily agreed to negotiate on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services, and agriculture.
According to Beijing, both sides have supposedly agreed to work towards canceling all tariff increases, intensify consultations, and reach a concrete agreement on mutual benefit and win-win as soon as possible. The White House statement does not convey a similar commitment.
Trump said China has agreed to reduce and remove tariffs on American cars from the current 40%, reported Bloomberg. China hasnt made a similar announcement on auto tariffs.
CNBC reported that Beijing has agreed to reconsider a takeover of NXP by American chipmaker Qualcomm that it had previously blocked, though China hasn’t said anything about it in its report.
Warning against soft commitment
Urging Beijing to flesh out the pledges made over the weekend, Mnuchin told the press that a new round of trade talks is expected to follow over the next three months, beginning next week.
It is very likely will be a temporary framework deal that seals a truce to put additional tariffs on hold for a definite time period. The move suggests a moment of caution for Trump who is keen to avoid new turbulence in the short term that could lead the trade dispute to the derailment of global economy and a crash of financial markets.
G20 and climate change
Meanwhile, in other summit news, Trump refused to sign on to the G20 statement on climate change, getting a separately made section for the US, thus becoming the only nation to pursue their withdrawal from the Paris accord in 2015.
The United States reiterates its decision to withdraw from the Paris Agreement, and affirms its strong commitment to economic growth and energy access and security, utilizing all energy sources and technologies, while protecting the environment, the communiqué read.
India Prime Minister Narendra Modi also met UN Secretary General Antonio Guterres to discuss comprehensive measures in tackling climate change, ahead of the climate summit in Poland.
The Foreign Secretary told the press, The Secretary-General specifically acknowledged that India plays a very major role in climate change negotiations. He acknowledged that Prime Minister had taken a number of very concrete steps towards addressing climate change.
Prarthana Mitra is a staff writer at Qrius