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Trump-Xi Meeting: High Noon for US-China Trade Talks

Trump-Xi Meeting at the G-20 Summit in Osaka, Japan - Photo: Xinhua.

JAKARTA (TheInsiderStories)-The Group of 20 (G-20) summit on 28-29 June will be overshadowed by the bilateral meeting on the sidelines of the summit between Donald Trump and Xi Jinping, as they try to conclude a US-China trade deal.

President Trump has signal that the US will implement another round of tariff hikes on China if US-China bilateral trade talks do not make sufficient progress.

While a bilateral trade deal is not expected to be concluded at the G-20 summit, the Trump-Xi talks may help to unblock the stalled trade negotiations. The Trump-Xi talks could open the path for renewed trade negotiations to defuse the US-China trade and technology wars that have been escalating in recent weeks.

A key focus of the bilateral talks will be in relation to protection of US intellectual property rights. Another key topic for the bilateral discussions will be in regard to the US Department of Commerce’s restrictions on US firms from selling or transferring technology to Huawei and its affiliated companies without first obtaining a US government license.

The Asia-Pacific region has suffered from a significant slowdown in export growth during the first half of 2019 due to the transmission effects of the US-China trade war on regional manufacturing supply chains as well as the impact of the slump in global electronics new orders.

The latest blow to Asia’s export sector has been the US government’s decision to hike tariffs on US$ 200 billion of Chinese products from 10 percent to 25 percent on 10 May. China has retaliated with countermeasures on 13 May, increasing tariffs on around $ 60 billion of US products from 1 June.

Adding to the downside risks for The Asia Pacific Accreditation Cooperation (APAC) region’s export sector, the US government announced on 13 May that another tranche of US tariff measures against China are under preparation, with a 25 percent tariff planned to be imposed on a further $ 300 billion of Chinese products that are exported to the US.

This next tranche of US tariffs would be another significant negative shock to China’s export sector. A further round of US tariff hikes on Chinese products would intensify negative spillover effects to the rest of the Asia-Pacific region from a deeper slowdown in China’s export sector.

However, if the Trump-Xi talks at the G-20 summit unblock the stalled bilateral trade negotiations and lead to a US-China trade deal, this will be very positive for global financial markets and a boost to the APAC economic outlook.

Written by Willy Matrona, Email: theinsiderstories@gmail.com