The decision of the Sino-US Heads of State to resume bilateral economic and trade negotiations can be said to be the best outcome that the two sides can achieve at the G20 Osaka Conference. Although competition and game between China and the United States in national core interests, strategic security and geopolitics will exist for a long time, the two sides agreed not to escalate tariff wars at the economic and trade level, thus creating a "buffer zone" for the situation to ease.
Analysts believe that it will take time to resolve the differences between China and the United States, and that there is still the possibility of a re-intensification of the trade conflict, so it is not too optimistic, and it is expected that a comprehensive agreement will be difficult in the short term. However, the easing of trade disputes and the temporary improvement of external environment will help to boost market confidence and give more time and space to domestic policies. The second quarter may be the low point of China's economy.
"This time, China accepted the premise that the United States would not continue to impose new tariffs, instead of demanding the abolition of all tariffs, and the United States responded in the same way. The relaxation of sanctions against Huawei indicated that both sides had taken a step backwards, which indicated that both sides were willing to return to negotiations and avoid further escalation of trade war." Zhang Minnan, chief researcher at the American-European Institute of the China Center for International Economic Exchange, said.
She pointed out that the pressure of the tariff war was felt by both the macro-economy of the United States and the large high-tech multinational corporations, as well as consumers. In particular, the operation, industrial chain and value chain of the high-tech companies in the United States were greatly disturbed and impacted. The economy has always been Trump's trump card, which determines Trump's ruling performance and election trend. However, if the escalation of trade war drags down the economic decline, it may seriously affect Trump's public opinion support and the trend of public opinion in the 2020 presidential election.
"Negotiations are still facing more uncertainties in the future, such as the game and friction between China and the United States on Huawei issues, scientific and technological competition, geopolitics and so on, which will also bring difficulties to the Comprehensive Agreement, but at the economic and trade level, tariff wars will not continue to escalate, which will ease the situation and establish a"buffer zone". Zhang Minnan said.
During the meeting of the heads of state of China and the United States on Saturday, Chinese President Xi Jinping and American President Trump agreed to resume economic and trade negotiations between the two sides on the basis of equality and mutual respect. The United States said it would no longer impose new tariffs on China's exports, and the economic and trade teams of the two countries would discuss specific issues. Trump also said the U.S. Department of Commerce would study whether Huawei would be removed from the blacklist in the next few days.
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