The seemingly endless saga of diplomatic tensions between the U.S. and China hit a major milestone. The annual G20 summit took place between 30 November and 1 December in Argentina. While there were 26 national leaders who attended the summit (19 participants plus seven “guest” heads of state), all eyes were on two of them. Several issues were on the agenda for the meeting: food sustainability, the future of cryptocurrencies in the global economy, and the successor treaty to NAFTA, dubbed the United States–Mexico–Canada Agreement (USMCA), was also signed.
But none could compare in the importance to the future stability of international markets than the ongoing trade war between the U.S. and China.
Although a resolution to this ongoing monetary conflict was not one of the “official” outcomes of the recent G20, the summit did provide the venue for a meeting between President Trump and Chinese leader Xi Jinping.
From whichever way you look at it, the outcome of that meeting looks to be very positive.
Despite the skepticism of the naysayers, international media have reported that Trump and Xi reached a “tariff truce” in the long (and to some industries devastating) trade war.
According to the White House, the new deal allegedly reached was the result of the two leaders’ “highly successful meeting,” in which Trump agreed to halt the further raise of tariffs—late last month, the president had threatened to elevate the tariff rate from ten percent to twenty-five on billions of dollars worth of goods. Both sides agreed to “immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft.”
One of the points that could spell an important win for Americans on the domestic front was Beijing’s agreement to designate Fentanyl as a controlled substance. This could potentially lay a huge hit to the opioid crisis currently raging in the U.S. as much of the illicit drugs come from Chinese manufacturers.
Last month, some clear signs began to emerge that perhaps reconciliation was possible for the American-Chinese rift. Now, as Chinese Foreign Minister Wang Yi said to reporters, the two countries are heading back to the “win-win” mentality.
It is important to understand how much of a game changer the recent Trump and Xi deal could be if actually implemented. In addition to working out the major trade deficit with China, major national security concerns involving PRC could finally be resolved. The American government has been dealing with threats of Chinese theft of U.S. technology for several decades. Additionally, there have been growing concerns that Beijing has been exploiting Chinese-produced technology to spy on U.S. assets. A series of regulations and other policy decisions from the American administration since Trump entered office have been focused largely on clamping down on Chinese tech companies and their products.
While China is far from a reliable partner, the very agreement by both sides to this plan moving forward is a very big step in the right direction. For the sake of global stability, let’s hope this is a deal that can be implemented.
