China, US agree to suspend tariffs at G20 summit
02 December, 2018
The United States and China have announced a ceasefire in their tariffs war, hours after US President Donald Trump upended another international forum by snubbing G20 action on trade disputes and climate change.
Over a dinner of steaks and Argentine wine in Buenos Aires, Trump and President Xi Jinping brokered a truce to ensure that, for now, there will be no further escalation to their tit-for-tat imposition of tariffs on goods worth hundreds of billions of dollars.
Trump withdrew his threat to raise the US tariffs even more on January 1, in return for a promise from China to buy more US goods and enter into a 90-day period of talks to resolve their differences.
Those include market access for US companies and protecting their intellectual property from theft by Chinese rivals.
Absent agreement in that time, tariffs now set at 10 per cent will be raised to 25 per cent, according to a White House statement.
“This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” Trump said in the statement, released as he flew home from a stormy trip spent accosting his fellow leaders at the world’s pre-eminent economic forum.
Chinese Foreign Minister Wang Yi told reporters in Buenos Aires: “It is conducive not only to the development of the two countries and the well-being of the Chinese and American people, but also to stable growth of the world economy.”
The Sino-US trade war sparked warnings at the G20 of the cost to the global economy if it continued unabated. Not long before the Trump-Xi dinner, the annual summit concluded in the Argentine capital with a watered-down statement.
The G20 communique was finally adopted after all-night haggling by negotiators ensured that the summit in crisis-hit Argentina at least finished with a joint platform, unlike recent G7 and Asia-Pacific summits where Trump’s objections caused unprecedented breakdowns.
Apart from the United States, all other G20 members agreed to implement the “irreversible” Paris Agreement on climate change, ahead of a UN summit on the planetary threat starting next week in Poland, it said.
But it said the “United States reiterates its decision to withdraw from the Paris Agreement,” mirroring the divergence seen last year when Trump shocked the global community by bucking the consensus at his first G20.
Credibility in question
The statement also omitted pledges by the G20 to fight protectionism and uphold multilateral trading rules, which used to be a mainstay of the world’s leading economies pre-Trump.
Instead, it merely recognized the “contribution” of the “multilateral trading system,” and added that it was “falling short” in goals of growth and job creation.
“The United States, which is the most open economy in the world, does not accept being shackled,” the summit’s host, Argentine President Mauricio Macri, told a news conference.
The G20 agreed to reform the World Trade Organization, which is accused by Trump of limiting US commercial freedoms to the advantage of China and other rivals.
But the conclusions were dismissed as “the lowest common denominator” by Thomas Bernes, a senior fellow at the Centre for International Governance Innovation in Canada who used to be a G20 negotiator for the Canadian government.
“It was the weakest communique we’ve ever seen from the G20,” he told AFP, contrasting the group’s posture now in the Trump era to its sense of common purpose when the leaders first met 10 years ago in the midst of a financial crisis.
Black Sea, black gold
Trump’s determination to plow on with his “America First” agenda stands in contrast to the alliance-building presidency of George H.W. Bush, whose death Friday triggered warm tributes from European leaders including German chancellor Angela Merkel and French President Emmanuel Macron at the G20.
Trump said his predecessor’s passing would prevent him from holding a post-summit news conference, “out of respect” for the Bush family.
It was Trump’s second cancellation at the summit after he pulled out of a meeting with Russian President Vladimir Putin, citing Russia’s recent seizure of three Ukrainian vessels off Crimea, although the two did cross paths at a G20 dinner.
The White House characterized that encounter as an informal chat, but Putin gave it more significance.
“We spoke standing up. I replied to his questions about the incident in the Black Sea,” Putin told reporters, after coming under pressure over the issue from Merkel and Macron at meetings in Buenos Aires.
Putin said it was “a pity” that he had not been able to have a proper meeting with Trump at the G20. “I think that one is really necessary. I hope that we can meet when the US side is ready for it.”
The Russian leader had a more productive dialogue in Buenos Aires with Saudi Crown Prince Mohammed bin Salman.
He greeted the crown prince as a long-lost friend, ignoring Western opprobrium over the prince’s alleged role in the murder of a dissident Saudi journalist in October.
Russia and Saudi Arabia are the world’s two leading exporters of crude, and Putin said they had agreed to extend a pact on oil production cuts, as prices slump on global markets.
That will resonate on the markets when trading in “black gold” resumes on Monday, as will the ceasefire to Trump’s trade war with China.
The G20 Summit of global leaders in Buenos Aires, Argentina opened on Friday under various political and economic clouds.
Xi rallied developing nation leaders to condemn protectionism and laud the global rules-based order.
This year’s two-day gathering was seen as a major test for the G20 industrialized nations to assuage trade tensions amid surging nationalist sentiment in many member countries.
The G20 accounts for two-thirds of the world population and is widely credited with avoiding a major global calamity after the 2008 financial crisis.
Xi and other leaders from the so-called BRICS group of leading emerging economies – Brazil, Russia, India, China and South Africa – issued a statement calling for a continued commitment to open international trade and support of a multilateral trading system via a strengthening of the World Trade Organization (WTO).
While the Trump-Xi meeting took center-stage, many parallel geopolitical dramas were playing out on the meeting’s sidelines. European Council President Donald Tusk said the European Union would extend its economic sanctions on Moscow this month after Russian ships fired last week on Ukrainian vessels in the Sea of Azov, seizing the boats and sailors.
Trump indicated Russia’s seizure of the Ukrainian ships was the reason he canceled a planned bilateral meeting with Russian President Vladimir Putin, where they had been expected to discuss Trump’s threat to withdraw from the Cold War-era Intermediate-Range Nuclear Forces treaty.
The two leaders made headlines nonetheless through a hearty handshake ahead of the G20’s family photo event.
A White House spokeswoman later denied that Trump said the ships’ seizure was the “sole reason” he cancelled the anticipated meeting. The Kremlin said it was willing to be “patient” in arranging a meeting with Trump. Putin used the time set aside to meet with Trump to pow-wow with Turkish President Recep Tayyip Erdogan.
Trump met briefly with Saudi Arabia’s crown prince, with the two men reportedly exchanging pleasantries during a leaders’ session, a White House official said. Trump later said “we had no discussion”, though he held out the prospect of spending more time with the crown prince.
US Secretary of State Mike Pompeo and Saudi Foreign Minister Adel al-Jubeir discussed the need for progress in the investigation into slain journalist’s brutal killing and dismemberment during talks in Buenos Aires on Friday, the US State Department said in a statement.
The Trump administration has come under certain fire for its perceived willingness to look the other way on the gruesome murder to maintain ties with a crucial Middle Eastern ally and big buyer of US armaments.
Reports also said British Prime Minister Theresa May told the prince in a meeting on the G20 sidelines that the killers of Khashoggi should be held to account and that Saudi Arabia should move to build confidence that such an incident would never happen again.
Macron said he told the prince in a separate meeting that Europeans will insist on international experts being part of the investigation into Khashoggi’s killing, Reuters reported. Putin reportedly pulled out a pen and paper to sketch the skirmish in the meeting, Bloomberg reported.
Saudi Arabia has insisted the prince had no prior knowledge of the killing.