President Donald Trump met with Chinese President Xi Jinping at the G-20 summit this weekend, and the two announced that there would be a temporary truce in the heated trade war that has caused so much disruption in certain sectors of both countries’ economies. While there was no indication of an imminent trade deal between the U.S. and China, the fact that a cease-fire has been announced would seem to hint at progress. If Trump can seal up a firm, favorable trade deal with China before the election season really swings into full play, it can only count as an enormous political victory.
“Trump said existing U.S. tariffs would remain in place against Chinese imports while negotiations continue, but that additional tariffs he’s threatened to slap on billions worth of other Chinese goods will not be triggered for the ‘time being,’” reported the Associated Press. “He added that the U.S. and China would restart stalled trade talks, saying, ‘we’re going to work with China where we left off.’
“Eleven rounds of talks have so far failed to end the standoff,” the AP continued. “The United States has imposed 25% import taxes on $250 billion in Chinese products and is threatening to target another $300 billion — a move that would extend the tariffs to virtually everything China ships to the United States. China has lashed back with tariffs on $110 billion in American goods, focusing on agricultural products in a direct and painful shot at Trump supporters in the U.S. farm belt.”
Trump’s announcement of a détente with China came days after his Treasury secretary said that the U.S. and China were closer to a finalized deal than they’d been since the president took office.
“We were about 90% of the way there and I think there’s a path to complete this,” Secretary Steven Mnuchin told CNBC on Wednesday. “The message we want to hear is that they want to come back to the table and continue because I think there is a good outcome for their economy and the U.S. economy to get balanced trade and to continue to build on this relationship. I’m hopeful that we can move forward with a plan.”
Trump’s tariffs against China have undoubtedly harmed our competitor’s economic interests more than our own, but that doesn’t mean there haven’t been widespread negative effects domestically. Farmers, particularly, are being hurt by retaliatory tariffs, and U.S. distributors who rely on aluminum and steel have not been shy about complaining about import costs. We don’t doubt for a minute that the U.S. can outlast China in any trade war, but the sooner the two countries can put this to bed in a fair, evenhanded way, the better.