And when President Trump sits down with President Xi on the sidelines of the G-20 summit, all eyes will be on whether they can restart trade talks that collapsed amid a war of words in May.
that collapsed amid a war of words in May. While both sides have good economic incentives to return to free trade, experts say the two superpowers also have good political reasons to hold firm and back up the tough rhetoric with action.On the U.S. side, the mood music was good with Treasury Secretary Steven Mnuchin saying Wednesday that Washington and Beijing were almost done with their trade deal.
The chief economist of the International Monetary Fund , Gita Gopinath, said in a blog post in May that the trade war “could significantly dent business and financial market sentiment, disrupt global supply chains and jeopardize the projected recovery in global growth in 2019.” “That would lead to domestic inflation and suddenly you’ve got consumers who are quite angry as to why the cost of buying a new iPhone has gone up appreciably,” he said. “And in an election year, when Trump has already talked about the economy extensively in his campaign, he probably won’t want that risk.”
The Bremen Express cargo ship prepares to dock at Florida's PortMiami, which saw China as its top trading country in 2018.“I think we have to remember: Xi Jinping does not have to get re-elected in 2020. Donald Trump does. And when there's more tariffs coming and they really hit the U.S. economy and the stock market takes a dive, Trump will want the stock market to go back up before his election,” he said.
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