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Abacus | China thinks it can weather Trump’s trade storm. It can, but not for long. Likewise the US
- Don’t hold your breath for a deal between Donald Trump and Xi Jinping at the G20 summit
- China thinks its economy can ride out the trade war. In the short term, it’s right. In the long term, not so much. Likewise for the US
Reading Time:4 minutes
Why you can trust SCMP
When Donald Trump and Xi Jinping get together at the end of this week for their “extended meeting” on the fringes of the Osaka G20 summit, there will be little hope on either side for a peace deal to end the US-China trade war any time soon. For both leaders, domestic politics makes an early deal unlikely.
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But if the hopes for peace on either side are slight, so too are the fears of a protracted conflict that threatens to drag on into the next year. Policymakers in both Washington and Beijing believe their economies are well placed to ride out a continued trade storm.
Their sanguine attitude may be a mistake.
In Washington, administration officials are in no great hurry to conclude a deal with China. Before he effectively ended negotiations with his early May tweets, Trump was facing mounting domestic criticism from both Republicans and Democrats for being too ready to rush into a deal which gave away too much and secured too little from Beijing
With US economic growth still solid, Wall Street hitting record highs and the US Federal Reserve ready, as it made clear last week, to support activity with interest rate cuts if things begin to look shaky, Trump has a powerful political incentive to be intransigent in any renewed negotiations.
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