US-China Summit Sees Low Hopes for Significant Trade Agreement

US President Donald Trump and Chinese leader Xi Jinping are set to meet for a two-day summit, with expectations centered around extending the current trade truce between the two nations.

As part of the meeting, Trump has announced a delegation of top business executives, including Tesla’s Elon Musk, Apple’s Tim Cook, and Nvidia’s Jensen Huang, who will accompany him on the trip. The US side has also flagged various business deals in the pipeline, although details have not been disclosed.

Analysts predict that any agreements reached during the summit may be modest, with a focus on stabilizing relations rather than achieving significant breakthroughs. Claire E Reade, a senior counsel at Arnold & Porter, notes that China’s trust issues with the US limit what can be agreed upon. Taiyi Sun, an associate professor of political science, suggests that any “opening up” of the Chinese market may initially focus on sectors where economic complementarity is most obvious, such as agricultural goods and high-value-added manufacturing products.

Both sides are also expected to address supply-chain vulnerabilities exposed by their trade war. Gabriel Wildau, a senior vice president at Teneo, notes that the US will likely offer tariff relief in exchange for Beijing’s commitment to keep rare earth exports flowing.

The current trade truce between the US and China was agreed upon in October 2018 and has been extended several times since then. However, US-Chinese business and trade remain severely constrained due to a decade of tit-for-tat economic salvoes between the two nations. The average US tariff on Chinese goods stands at 47.5 percent, while China’s average tariff on US goods stands at 31.9 percent.

The summit is set to conclude on Friday, with Trump and Xi expected to announce any agreements reached during their meetings.

Source: Al Jazeera