China and the United States resume trade negotiations. Can the tariff dispute be resolved?

Trump tweeted that he will restart trade negotiations with Chinese President Xi Jinping during the G20 summit in Japan next week. The news warmed up the U.S. stock market, with all three major stock indexes closing at their highest levels since early May...

In a Twitter post, Trump said, "Had a very good phone conversation with President Xi Jinping of China. We will have an expanded meeting next week during the G20 Summit in Japan. Our respective teams will begin consultations prior to the meeting." China, which had previously refused to disclose whether the two leaders would meet, finally confirmed the meeting.

G20 resumes consultations, China-US relations see a turnaround

Reuters reported that China and the United States are embroiled in a costly trade war that has weighed on financial markets and damaged the global economy.

Negotiations for a broad trade deal between the two countries collapsed last month after U.S. officials accused China of reversing earlier commitments, and interactions have been limited since then. Trump has repeatedly threatened to impose tariffs on more Chinese goods, which would further escalate the dispute and companies in both countries are eager to avoid.

On the Chinese side, President Xi Jinping said, "On economic and trade issues, the two sides should resolve them through equal dialogue, and we also hope that the US will treat Chinese companies fairly. I agree that the economic and trade teams of the two countries should maintain communication on how to resolve differences."

At the same time, both sides reiterated long-held positions: U.S. officials demanded that China make structural reforms and change the way it treats American companies; China demanded dialogue as an alternative to costly tariffs.

Washington has already raised tariffs to 25% on $250 billion worth of Chinese goods, covering everything from semiconductors to furniture. Trump has threatened to impose tariffs on another $325 billion worth of Chinese imports, covering nearly all remaining Chinese goods, including cell phones, computers and clothing.

Trump has publicly said he hopes to meet with Xi next week during the G20 summit in Japan, even as he threatens to escalate the dispute by imposing tariffs on more Chinese goods. China's confirmation of the meeting avoids the possibility of Washington being snubbed, which could have triggered another round of tariffs. "I think there's a good chance that the meeting will go well, and frankly, our people will start preparing for a deal tomorrow. The teams will start preparing for a deal. So we'll see. Both China and the United States want to make a deal, provided that the deal turns out well for everyone," Trump said, praising his relationship with Xi and expressing optimism about reaching a deal.

"I think we have a chance. I know China wants to make a deal. They don't like having additional high tariffs slapped on them and a lot of companies are leaving China to avoid the tariffs," he said.

Trump's tweets provided new impetus for a rebound in U.S. stocks as investors bet that the restarted talks could defuse an escalating trade war between the world's two largest economies.

"This is a very positive development," said Clete Willems, the trade negotiator for the Trump team, who mentioned the importance of the Xi-Trump meeting during the last G20 summit in Argentina. "The leaders' level contact during the G20 summit last year was key to restarting the negotiations. It was crucial to control the current political situation and get the negotiations back on track again," he said.

US continues to exert pressure

White House economic adviser Larry Kudlow declined to give details on how the two countries would prepare for the Trump-Xi meeting, and said the United States would continue to pressure China to change its practices in areas such as intellectual property theft and forced technology transfers.

“The fact that they are meeting is a good thing,” he had said of the Japan summit. “Our position will continue to be that we want them to make structural reforms. We want structural reforms on every front ... intellectual property theft, forced technology transfers, cyberattacks. And certainly trade barriers. We have to have something enforceable.”

Regarding China's desire for the United States to cancel tariffs, U.S. Trade Representative Lighthizer, the U.S. negotiator, said that negotiations alone are not enough. "I don't know if tariffs alone can stop them from cheating. I don't think you have any other choice," Lighthizer said at a congressional hearing. "I know one thing that won't work is to negotiate with them. Because we've been talking for 20 years," he said.

China's attitude

According to CCTV News on the evening of the 18th, President Xi Jinping pointed out in a phone call with US President Trump that Sino-US relations have encountered some difficulties in recent times, which is not in the interests of both sides.

"I am willing to meet with the President during the G20 Osaka Summit to exchange views on fundamental issues concerning the development of China-US relations," Xi Jinping said.

Xi Jinping stressed that China and the United States will benefit from cooperation and lose from confrontation. The two sides should promote China-US relations based on coordination, cooperation and stability in accordance with the consensus we have reached, on the basis of mutual respect and mutual benefit. As the two largest economies in the world, China and the United States should jointly play a leading role, promote the G20 Osaka Summit to achieve positive results, and inject confidence and vitality into the global market.