US vs China: Will they make amends at the G20 Summit?

US vs China: Will they make amends at the G20 Summit?

Like an awkward run in with an ex at a house party, President Trump and President Jinping are likely to meet in Osaka this June at the G20 Summit.

Although neither party has agreed to a meeting yet, Osaka is seen as the last opportunity for the two presidents to talk and resolve things before the situation worsens, and Trump enters the 2020 presidential campaign.

Donald Trump, an avid ‘Tweeter’, enraged China with empty threats of increased tariffs and other disparaging remarks on Twitter. Now, the pair are no longer on speaking terms. If they sit down together at the G20, then it will likely result in a big win for everyone.

So, let’s get up to speed with the situation, and find out why Jinping and Trump are trading blows.

What is the G20 Summit?

The G20 Summit is an international forum, where leaders of the 19 member countries and the European Union (20 in total) come together. Their aim is to discuss, and ultimately, cooperate to achieve global economic growth. The member countries (and the European Union) consist of the largest economies and trade nations in the world, like Australia, India, Mexico, Germany and the US and China. Each country sends a delegation including the Finance Minister and the head of the central bank.

The first summit was held in 1999, with representatives meeting to ensure financial stability and solve global issues together such as pollution.

The US-China trade war

The US and China are currently in a trade war, which is where two states create or increase tariffs, and impose other trade barriers on each other. For example, a country may put a complete embargo on the importation of goods from another country.

The US-China situation has far-reaching impacts, damaging the global economy. Given that both countries are some of the biggest economies in the world, the tension shifts the footing of almost everything. Companies have to review their supply chains and operations, growth slows or stalls, and political tension can spill over into conflict.

President Trump is threatening high tariffs on Chinese goods in the US if President Jinping refuses to meet during the G20 summit. The threat is a stalemate – if Jinping accepts he may be perceived as weak at home in China, but if he refuses it could cost both local and global economies enormously.

The US has also banned Huawei Technologies Co. over suspicions it’s acting as spy arm for the communist party. Beijing has responded by drafting a list of ‘unreliable’ US entities, impacting their operations in the region.

US companies (and the US Government) are looking to Taiwan for back-up solutions, which rattles the cage for China even more.

China will also likely want to downplay any negative influence from the recent Hong Kong protests, where some two million people spilled into the streets to denounce the extradition law that would see residents deported to mainland China.

Jinping finds himself in a very tough position entering the G20 summit, so it’s also in his best interests to find a solution in tandem with Trump.

With G20 approaching, it is with great hope that leaders take the high road, put their differences aside, and settle on solutions that are truly beneficial. If not, our global economy is looking at some serious implications.