US-China trade truce increases pressure at home for both Trump, Xi to cut a deal, analysts say
- US President Donald Trump is entering the 2020 election cycle, with pressure to stabilise the economic environment
- Chinese counterpart Xi Jinping can also not seen to be weak when signing off on a deal after the pair agreed a temporary truce last weekend at the G20 summit in Japan
For decades, Jasco Products Company has outsourced production of its doorbells, lights and surge protectors to China without a second thought. But, a trade war with the United States that has been raging for the last year has put the Oklahoma-based company and thousands of other firms like it – both American and Chinese – at risk.
The tit-for-tat battle between the world’s two largest economies is already weighing on business confidence, analysts have warned, and has the potential to tip the global economy into recession if it escalates further.
As a result, US President Donald Trump and China’s Xi Jinping are facing increasing pressure domestically to come to a quick resolution – even if all of the underlying issues are not immediately addressed, economists and analysts said.
“What is most important for Trump, in an election cycle, is to win. If he could maintain a stable economic environment with strong capital markets, it raises his chance of being re-elected,” said Orient Securities chief economist Shao Yu.
