Expectations for the meeting between President Trump and President Xi are running high, as the two leaders prepare to meet on the sidelines of the Group of 20 (G20) meeting in Osaka, Japan. This will be the first meeting between the two leaders since trade negotiations collapsed in May, after China allegedly backpedalled on U.S. demands. Both sides have since ratcheted up their punitive measures and tariffs.
The U.S.-China trade war is dominating the G20 discussions and casting a shadow on global growth estimates. While a truce is unlikely, one possible scenario for restarting the negotiations is a goodwill statement. At the very least, President Trump signaled that he hopes the talks are "productive," although both sides have hardened their stance in advance of the meeting.
Both leaders are under enormous domestic pressure not to give in or be seen as capitulating. President Trump faces a tough reelection bid next year and needs a good trade deal with China to secure the 2020 election, although his tariffs may be disproportionately hurting the core of his voting base, U.S. farmers. Learn more in China-US Focus's explainer video. Meanwhile, the global trade landscape is undergoing a dramatic and possibly permanent shift, as Chinese businesses diversify their trade relationships, and U.S. businesses move production elsewhere. Some reports indicate that companies are circumventing the tariff rule by having their products stop at intermediate destinations, especially Vietnam, before entering the U.S., effectively dodging Trump's tariffs.
Prepared by China-US Focus editorial teams in Hong Kong and New York, this weekly newsletter offers you snap shots of latest trends and developments emerging from China every week, while adding a dose of historical perspective.