US, China discuss Xi-Trump summit as trade tensions simmer

President Donald Trump meets with China’s President Xi Jinping during their bilateral meeting at the G20 Summit, in Buenos Aires, in December 2018

The U.S. and China are discussing arrangements for the meeting between Donald Trump and Xi Jinping on the sidelines of the Group of 20 summit, a senior Chinese trade official said, as Beijing warned about consequences of American trade measures.

The trade teams were working to implement the decision by the top leaders, Vice Commerce Minster Wang Shouwen told a news briefing yesterday in Beijing. Wang provided no specifics on what communications have occurred. “Compromise will be on both sides. It will be a two- way street,” he said, adding that any talks must be based on mutual respect, meaning “respect for each other’s sovereignty.”

The face-to-face meeting between the leaders of the world’s two largest economies will be closely watched, as markets anticipate an effort to cool mounting trade and security disputes. Talks broke down last month after Trump accused China of reneging on its commitments, increased tariffs on USD200 billion of Chinese imports and threatened to target the remaining $300 billion with duties of as much as 25%.

Although the U.S. has taken steps to ease tensions in recent days, postponing a planned speech by Vice President Mike Pence on Chinese human rights, mounting strategic disputes have tempered expectations for a trade break through. The China Daily, a state-run English-language newspaper, said in an editorial Sunday that “for such a meeting at such a point, course-setting is probably more important than any specifics.”

Trump and Xi planned to discuss a range of shared issues in Japan, Assistant Minister of Foreign Affairs Zhang Jun told the briefing on Xi’s G-20 plans. Chinese officials also called on the U.S. yesterday to roll back restrictions on Huawei Technologies Co. and other technology firms and refrain from weighing in on the recent unrest in Hong Kong.

Wang, the commerce ministry official, argued that blocking Chinese companies including Huawei from buying U.S. software and components also harms the interests of American firms and restricting exports doesn’t help to balance trade. China hoped the U.S. would remove its companies from the entities list, Wang said.

Meanwhile, China’s foreign ministry said at a separate briefing that the Memphis, Tennessee-based FedEx Corp. needed to better explain its errors with packages related to Huawei. In the latest case, the shipping company has said it made a mistake last week by rejecting a shipment sending one of the Chinese company’s phones to the U.S. from the U.K.

“The U.S. government has been trumping up charges to abuse national security and employing state power to clamp down on a Chinese company,” Foreign Ministry spokesman Geng Shuang said in response to a question on the incident at a regular news briefing yesterday in Beijing. “That is the root cause of the problem. U.S. bullying has hurt Chinese companies and U.S. companies. It affects normal operations of businesses and disrupts normal cooperation.”

“I want to tell individuals in the U.S. that they have been living in a panic made by themselves, and they have reached a state of extreme nervousness in which they even apprehend danger in every sound,” Geng said.

Globalization has brought an “unprecedented” level of division of labor across borders and societies, reducing the significance of where products are manufactured and assembled, Geng said.

“Against such a backdrop, any attempt to achieve ‘absolute security and controllability’ by isolating oneself is nothing but fool’s talk,” Geng said.

Another sticking point could be Hong Kong, where historic protests against a Beijing-backed extradition bill have prompted U.S. legislation to revisit the former British colony’s special trading status. Activists have announced a “G-20 Free Hong Kong rally” on Wednesday in an attempt to put the issue on the summit’s agenda. MDT/Agencies

State media says Beijing will fight ‘to the end’

China has the strength and patience to withstand the trade war, and will fight to the end if the U.S. administration persists with it, China’s state-run People’s Daily said in an editorial Saturday.

The U.S. must drop all tariffs imposed on China if it wants to negotiate on trade, and only an equal dialogue can resolve the issue and lead to a win-win, the newspaper said.

The paper, a mouthpiece for China’s ruling Communist Party, said the U.S. had failed to take into account the interests of its own people, and they are paying higher costs due to the trade dispute. “Wielding a big stick of tariffs” also disregards the condition of the U.S. economy and the international economic order, according to the editorial.

U.S. President Donald Trump and Chinese President Xi Jinping will meet on the sidelines of the G20 summit in Japan next week to discuss the trade war between their two countries. Trump has repeatedly asserted that tariffs on Chinese imports are paid by China, not U.S. consumers – in defiance of the consensus of economists.

If the U.S. chooses to talk, “then it must show some good faith, take account of key concerns from both sides and cancel all tariffs,” the paper said. Bloomberg