Step in right direction as US and China ease trade war tensions
Cautious optimism that China and the United States can further de-escalate the trade row Washington started has peaked and may soon be vindicated. It rose when the two sides, meeting in Geneva last month, agreed on a 90-day pause in new sky-high bilateral tariffs to allow for negotiations, fell with more US tech export bans and rose again after last week's phone call between presidents Xi Jinping and Donald Trump.
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Now hopes have received a major boost after top economic and trade officials from each side, meeting in London, reached agreement in principle on a 'framework' to implement the consensus between Xi and Trump. Indeed that is what Trump alluded to yesterday when he said: 'Our deal with China is done, subject to final approval with President Xi and me.' That, however, is easier said than done, as seen by the extent and acrimony of chilled relations between the two sides.
The agreement follows two days of trade talks between top officials in London in the first meeting of what is now called the China-US economic and trade consultation mechanism. Vice-Premier He Lifeng led the Chinese delegation. China's top trade negotiator, Li Chenggang, said it was hoped progress at the London meeting would be conducive to increasing trust between China and the US. That achievement on its own would be significant bilaterally, regionally and globally.
The world will be watching for final approval of the framework from the top level. Expectations have been shaped by official accounts from both sides of the Xi-Trump call regarding sensitive issues. They include restrictions on Chinese exports of rare earths – an issue that has been resolved according to US Commerce Secretary Howard Lutnick – and US visas for Chinese students. Importantly, the talks have gained momentum without serious setbacks, building on foundations laid on neutral ground in the initial talks in Geneva.
News of the 'framework' agreement broke the same day the People's Daily published an interview with the founder of multinational Huawei Technologies, Ren Zhengfei, which seemed more than a coincidence. Ren said Americans overestimated the importance of his company, which owed its success to hard work and research over the years.
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The interview was a timely signal that no matter how the US restricted China's tech development, it would not stop China from developing its own core technology.
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