In the G20 summit taking place now in Argentina, probably nothing is attracting as much attention now as the planned talks between Donald Trump of the U.S. and China’s Xi Jinping.
The main topic for the two presidents is likely to be the ongoing trade war between the countries. But with tensions going in and a recent move by Trump, it’s unclear whether a face-to-face meeting will result in any improvement. That could have significant impact on the global economy.
China and the U.S. only recently restarted trade talks in the escalating trade war as both sides have imposed stiff tariffs that are slowing the two largest economies in the world. About 4% of China’s GDP is dependent on what the U.S. buys. At the same time, China is the third largest export market for the U.S., according to the Census Bureau. And the Tax Foundation has estimated the trade war will cost more than 0.12%, in GDP and 94,000 full-time jobs domestically.
But Trump has been volatile in the weeks preceding the summit. He cancelled a planned meeting with Russian President Vladimir Putin yesterday, purportedly over ongoing conflicts between Ukraine and Russia.
Trump reiterated earlier this week that tariff levels on $200 billion in Chinese imports would see their planned increase, according to the BBC.
European allies to the U.S. expect instability, the Brookings Institution told NPR. And Goldman Sachs analysts have said that the most likely outcome of the Trump-Xi meeting is an escalation in the trade war, according to Business Insider.
In short, if you’re in business or an investor, don’t hold your breath.