In the upcoming week, the US and China will have their last chance to broker a ceasefire deal, amidst an increasingly tense trade war, as their presidents would be meeting in Buenos Aires, Argentina, at the G20 summit. As trade war is increasingly seeping the global growth and economic health has been suffering terribly from frictions between these two economies, tensions would loom large when Xi Jingping and Donald Trump will be meeting on the sideline of a G20 summit in Argentina.
As it was being mentioned earlier in APEC summit, that there would be no trade deal, unless China bends the knee, the chances of a positive outcome appears to be querulous. Washington is set to hike the tariffs on $200 billion Chinese imports, from 10 to 25% in January, if there is no agreement.
“We are optimistic about the summit as an opportunity to avoid further escalation, but not to pull back already announced tariffs,” a UBS economist mentioned. “If no deal is reached, investors should come to realize that tariffs are no longer a bargaining chip to bring China to the negotiation table.
Rather, tariffs are becoming part of a longer-term strategy to unplug China from globalization, contain its economic power (and hence its soft and hard power altogether) and give the US greater strategic advantage,” a Daiwa Capital Market analyst commented regarding US-China trade deal.