Sourabh Gupta

Asian Angle | Donald Trump proves trade wars with China are good and easy to win

The US-China stand-off is over after both leaders sent top officials to hash out a deal that would end their quarrels over trade, investment and intellectual property rights

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Chinese President Xi Jinping and US President Donald Trump. Photo: AP

Sourabh Gupta

Published: 3:15pm, 25 May 2018Updated: 5:11pm, 25 May 2018

Less than three months after eliciting utter incredulity with his promise that trade wars were good and easy to win, Donald Trump showed how such conflicts are won – at least with China. It requires a sense of restraint, respect for international law, recognition of the other party’s inherent rights and a willingness to bring in the heavy artillery not only for one’s advantage but also in the service of mutually beneficial goals. Many of these features were not hitherto known to be core Trumpian attributes.

Over the third weekend of May, Trump’s Treasury Secretary Steven Mnuchin and President Xi Jinping’s economic tsar, Vice-Premier Liu He, deftly spearheaded and shepherded the two sides towards a win-win outcome that draws a red line under their recent trade, investment and intellectual property rights (IPR) quarrels.

The trade row has now effectively been shelved indefinitely; the investment and IPR-related differences have been narrowed – indeed to the extent that the Trump administration now shares an important stake in the successful implementation of the international economic dimension of Xi’s third plenum reforms.

Chinese Vice-Premier Liu He and US Treasury Secretary Steven Mnuchin were the two chief negotiators in the US-China trade war. Photo: Kyodo

The trade war that Donald Trump threatened against China in March has not just been placed on hold – although official statements suggest so – it is for all intents and purposes over. And not a moment too soon. As early as June 2018, an action-reaction cycle of tariff increases involving more than US$100 billion of bilateral trade and aggravated investment restrictions could have broken out that would have counted global economic victims far beyond America and China’s shores.

Watch: China and US put trade war on hold