U.S. President Donald Trump and Chinese President Xi Jinping have agreed to resume trade talks between the two countries at the meeting on the sidelines of the Group of 20 (G20) summit in Osaka. The United States also agreed to hold off imposing new tariffs on Chinese exports. This marks the second time that the world’s two superpowers have reached a trade truce since the Trump administration announced last July that it would impose 25 percent tariffs on 50 billion dollars worth of Chinese goods. However, another truce does not mean that the war is over because the trade spat is getting prolonged with wider ramifications and no key issue has been addressed.
Following an 80-minute-long meeting with his Chinese counterpart, President Trump implied a plan to ease sanctions on Chinese company Huawei and postpone slapping additional tariffs, which signals that he chose practical interests rather than escalating tensions. Xi also said that despite current disputes, they should not fall into the trap of conflict confrontation since the interests of both countries are highly intertwined.
The two leaders, however, had to reaffirm that their positions are poles apart on key pending issues. While Washington has consistently demanded that Beijing should amend its law to correct China’s alleged unfair trade practices, this was not even mentioned during the latest summit meeting. Moreover, even though Trump said he would ease the ban on Huawei, he added that it would be made possible when the trade talks reach the end. This reveals a wide gap in the two sides’ perspectives as China has suggested that the lifting of the Huawei ban should be the prerequisite of negotiations.
The “Osaka truce” is apparently due to the two countries’ strategic assessment that they need to proceed with the trade negotiations in a mid- and long term. The bilateral relations can turn sour anytime, and the two sides may revert to the situation of escalated tensions if progress is stalled in follow-up negotiations. Over the last few months, South Korea has found itself in a tricky position between the United States and China. Now that the truce has been announced, the Seoul government should expand its diplomatic efforts and businesses need to reduce their dependency on China to prepare against another round of trade wars.