The U.S. and China Will Resume Talks Amid Ongoing Trade War



John Walcott | TIME

U.S. officials and some outside experts say they expect this week’s meeting between President Trump and Chinese President Xi Jinping to head off an escalating trade war and restart trade negotiations between the world’s two largest economic powers.

The two leaders are scheduled to meet on the sidelines of the June 28 and 29 G20 economic summit in Osaka, Japan, amid signs that both sides are eager to forestall an escalating round of tariffs that is pushing China deeper into debt and prompting U.S. business and political leaders to oppose additional tariffs on imports from China.

One sign that the Trump Administration wants to give economic peace a chance is the fact that Treasury Secretary Steven Mnuchin, who is set to attend the Trump-Xi meeting, is holding up a final decision on selling advanced U.S. tanks and other military equipment to Taiwan, said a U.S. defense official who spoke on the condition of anonymity.

The Defense Department has notified Congress of the proposed $2 billion sale of M1A2 heavy tanks and anti-air and anti-tank missiles. But the administration has yet to act on the move, which would anger Beijing in the midst of an effort to restart trade negotiations.

“We are firmly against U.S. arms sales to Taiwan,” Chinese Foreign Ministry spokesman Geng Shuang told reporters on June 4. “We urge the U.S. to see the high sensitivity and severe harm of arms sales to Taiwan.”

Another signal of the Administration’s reluctance to anger Beijing right now is its muted response to the massive protests in Hong Kong to a bill that would allow China to extradite the territory’s residents. The bill has now been withdrawn.

Some U.S. lawmakers reintroduced a bill defending Hong Kong’s autonomy on June 14, but the Administration so far has not picked up the issue.

In addition, U.S. Special Trade Representative Robert Lighthizer, a trade hawk, sounded a slightly more moderate tone on Capitol Hill this week, saying, “It’s certainly in the interest of both China and the United States to have some kind of successful agreement. The President has said he definitely wants an agreement if we can get a great agreement for America.”

[To view the original article, click here]