Beijing: The world's top two economies are experiencing the adverse effects of ongoing trade wars, and a call between Chinese President Xi Jinping and US President Donald Trump scheduled for Friday is set to address critical issues such as the social media app TikTok, tariffs, and technology, as experts informed Anadolu.
According to Anadolu Agency, Shaun Rein, the founder of China Market Research Group, emphasized the necessity of a deal for Trump to stabilize the trading system, acknowledging that high tariffs are also detrimental to China. As part of a series of diplomatic engagements, trade negotiators from both countries held a fourth round of talks earlier this week in Spain, indicating progress towards a deal concerning TikTok. Additionally, top diplomats and defense chiefs from China and the US engaged in separate discussions last week.
This upcoming call will mark the first interaction between US Defense Chief Pete Hegseth and Chinese counterpart Dong Jun during Trump's second term. Hegseth clarified that Washington is not seeking conflict with China, nor is it pursuing regime change or economic strangulation of the world's second-largest economy. Elizabeth Freund Larus, an adjunct senior fellow at Pacific Forum, highlighted the mutual recognition by both sides that the trade war is unfavorable for their citizens, with US consumers and businesses facing higher costs for Chinese imports and China's economy suffering from slowed export sales.
Since Trump's return to the White House, this will be the third call between the two leaders. Reports suggest that the US and China are in the final stages of negotiating a potential state visit to China by President Trump.
In the early days of his second administration, Trump imposed a hefty 245% tariff on imports from China, accusing Beijing of exploiting bilateral trade relations. While trade between the two nations stands at around $582 billion, it heavily favors China, prompting Trump to seek a reduction in the trade deficit. A temporary truce on tariffs has been granted to Beijing until November, with a 10% levy still imposed on imports.
The high-stakes call comes in the wake of Xi's inspection of a significant military parade in Beijing alongside leaders like Russian President Vladimir Putin and North Korean leader Kim Jong Un. Trump criticized the event as a conspiracy against Washington, prompting swift denials from Moscow and Beijing. Additionally, Xi recently hosted a summit of the Shanghai Cooperation Organization in Tianjin, where leaders expressed support for multilateral trade, indirectly critiquing Trump's tariff policies.
Shaun Rein noted that while China appears to have the upper hand in the trade war, it is willing to offer more access to US firms in terms of technology and algorithms. During recent trade talks in Spain, it became evident that China is open to relinquishing control of TikTok to the US, although it remains protective of its intellectual property.
Despite challenges, Rein highlighted China's efforts to diversify its supply chain, sourcing soybeans from Brazil, beef from Australia, and oil from Canada, while increasing domestic chip production. However, the trade war continues to inflict economic pain on both countries, necessitating an agreement to facilitate free trade and address concerns around inflation and economic slowdowns.
Larus speculated that while a comprehensive trade deal might not be imminent, smaller resolutions may emerge from the call, potentially addressing issues like TikTok's ownership and minor trade agreements. Nonetheless, significant challenges such as China's support for Russia amid the Ukraine conflict, tensions over Taiwan, and disputes in the South China Sea are unlikely to be resolved.
Rein indicated that the Xi-Trump call is likely to focus on reducing tariffs, enhancing tech access, and reaffirming the US's one-China policy concerning Taiwan.