Prospect of Trump-Xi talks raises hope for thaw in trade war

A Xi-Trump meeting, if it happens, would take place during a summit of leaders of the Group of 20 biggest global economies in Argentina in late November. (File/AFP)
Updated 13 October 2018

Prospect of Trump-Xi talks raises hope for thaw in trade war

  • Worries about the increased tariffs the two sides have imposed on each other’s goods contributed to a dizzying bout of volatility in financial markets this week
  • The trade feud has been fueled by US accusations that China engages in cyber-theft and coerces foreign companies into handing over technology in return for access to the Chinese market

BEIJING: With China and the United States opening the door to a meeting next month between Presidents Xi Jinping and Donald Trump, hopes are rising for a potential easing of tensions in the trade war between the world’s two largest economies.
Worries about the increased tariffs the two sides have imposed on each other’s goods contributed to a dizzying bout of volatility in financial markets this week. The higher tariffs raise costs for companies in both countries, and economists say that if they remain in place indefinitely, they could depress economic growth.
A Xi-Trump meeting, if it happens, would take place during a summit of leaders of the Group of 20 biggest global economies in Argentina in late November.
“I don’t think any decision has been made in regards to a meeting,” Treasury Secretary Steven Mnuchin told reporters Saturday in Bali, Indonesia, where he’s attending global finance meetings.
Still, Larry Kudlow, Trump’s top economic adviser, said in Washington on Friday that preparations for the talks were under way.
“It looks like there will be a meeting in Buenos Aires at the G-20,” Kudlow said in an interview with CNBC. “We are looking at it. The Chinese are looking at it. Preparations are being made. I can’t say 100 percent certainty, but there is no question everybody is looking at it.”
Kudlow said that so far, the administration viewed China’s negotiating offers as “rather unsatisfactory” but that “maybe talks between the two heads of state will bear fruit.”
Asked if China would need to make specific concessions for such a meeting to take place, Mnuchin said, “To the extent that we can make progress toward a meeting I would encourage that and that’s something we’re having discussions about, but for the moment there’s no preconditions. The president will decide on that.”
The trade feud has been fueled by US accusations that China engages in cyber-theft and coerces foreign companies into handing over technology in return for access to the Chinese market, as well as by Trump’s anger over China’s trade surplus with the US It is far from clear that the US might be preparing to consider lifting penalty tariffs on about $250 billion of Chinese products.
Mnuchin repeated the Trump administration’s determination to achieve a more balanced trading relationship that does not require foreign companies to form joint ventures to transfer technology to gain market access.
Lu Kang, a spokesman for China’s Foreign Ministry, offered no specifics Friday but said, “I have also seen the relevant reports.”
The Wall Street Journal and the Washington Post have cited officials as saying Trump has decided to proceed with a meeting with Xi.
Global indexes bounced back sharply Friday after their recent plunges, on word of the possible presidential meeting, along with strong Chinese export data. Japan’s Nikkei 225 index gained 0.5 percent to 22,694.66 after a nearly 4 percent loss on Thursday.
Hong Kong’s Hang Seng surged 2.1 percent to 25,801.49. The Shanghai Composite index advanced 0.9 percent to 2,606.91. Shares recovered in Taiwan and rose throughout Southeast Asia.
On Wall Street, the Dow Jones Industrial Average jumped 305 points, or 1.2 percent, in late-morning trading, and the Nasdaq composite surged 138 points, or 1.9 percent. Later, both stock indexes gave up much of their gains.
Friday’s volatility followed a swoon over the previous two days that erased 1,300 points from the Dow and dragged the S&P 500 down more than 5 percent.
Reports that Mnuchin has advised against labeling China a currency manipulator — a status that could trigger penalties — were also seen as easing tensions. The Chinese currency has been falling in value against the dollar in recent months, raising concerns that Beijing is devaluing its currency to make Chinese goods more competitive against US products.
In his comments in Bali, Mnuchin did not say what the forthcoming Treasury report, set to come out next week, will conclude about China’s currency practices. In the past, Treasury has placed China on a watch-list but found that Beijing did not meet the threshold to be labeled a currency manipulator.
Mnuchin met Thursday with Yi Gang, head of China’s central bank.
“I expressed my concerns about the weakness of the currency.” Mnuchin said.
He said that in the discussions he had with the Chinese, they had made clear that they didn’t see a further weakening of the Chinese yuan as being in their interests.
Concerns have been raised that China, the largest foreign holder of US Treasurys, might start dumping its holdings as a way to pressure the United States in the trade dispute. But Mnuchin said this possibility didn’t concern him because it would be contrary to Beijing’s economic interests to start dumping its Treasury holdings.
“That would be very costly for them,” Mnuchin said.
China’s surplus with the United States widened to a record $34.1 billion in September as exports to the American market rose 13 percent from a year earlier to $46.7 billion, down slightly from August’s 13.4 percent growth. Imports of American goods increased 9 percent to $12.6 billion, down from August’s 11.1 percent growth.
Beijing’s exports to the United States have at least temporarily defied forecasts they would weaken after being hit by punitive US tariffs of up to 25 percent.
September marked the second straight record Chinese monthly trade surplus with the United States. Export numbers have been buoyed by producers rushing to fill orders before American tariffs rose. But they also benefit from “robust US demand” and a weaker Chinese currency, which makes their goods cheaper abroad, Louis Kuijs of Oxford Economics said in a report.
The Chinese yuan has lost nearly 10 percent of its value against the dollar this year. That prompted suggestions Beijing might weaken the exchange rate to help exporters. But that might hurt China’s economy by encouraging an outflow of capital. The central bank has tightened controls on currency trading to prevent further declines.


Afghan delegates head online for crucial talks

Updated 01 June 2020

Afghan delegates head online for crucial talks

  • Peace hopes rest on virtual forum with Taliban amid virus threat

KABUL: Afghan government and Taliban delegates are expected to begin online talks in mid-June in a bid to end a decades-old conflict in the country, officials told Arab News on Sunday.

While past meetings have been held in person, the latest round of negotiations will take place online because of the threat of coronavirus in the war-ravaged country.

“We see no challenges, the atmosphere and preparations are all set for the talks,” Feraidoon Khawzoon, a spokesman for Abdullah Abdullah, newly appointed chief of the High Council for National Reconciliation, told Arab News.

Negotiations could begin in “the next 10 or 15 days,” he said.

“The announcement of a cease-fire, a reduction in violence and the exchange of prisoners were all requirements for the start of the talks, and we have had progress on them recently,” Khawzoon said.

On Wednesday the Afghan government released a list of 20 delegates due to hold peace talks with the Taliban.

The team will be led by Mohammad Masoom Stanekzai, a former spy chief who has held indirect negotiations with the militants in the past outside Afghanistan, he added.

In the lead-up to the talks, President Ashraf Ghani’s government will release 3,000 more Taliban prisoners, an official close to the Afghan leader told Arab News on condition of anonymity.

More than 2,000 Taliban inmates have already been freed as part of a historic peace deal in February.

In return, the Taliban released hundreds of government troops and, in a surprise move, announced a three-day cease-fire last week for Eid Al-Fitr.

The peace moves follow a buildup in fighting between the two sides despite the pandemic. Taliban attacks killed at least 146 people and injured 430 during Ramadan. 

Fears had been growing that the peace deal signed on Feb. 29 between the Taliban and the US would collapse.

The joint cease-fire followed talks in Qatar last week between the Taliban and Zalmay Khalilzad, US special representative for Afghanistan.

Khalilzad later traveled to Kabul for meetings with Afghan political leaders over a reduction in violence and an exchange of prisoners. 

“We welcome the Taliban’s decision to observe a cease-fire during Eid, as well as the Afghan government reciprocating and announcing its own,” Khalilzad said last Sunday.

Increasing Taliban attacks on government troops, and political infighting between Ghani and Abdullah over who would assume office as president, have delayed the talks.

After Washington failed to reconcile Ghani and Abdullah, both leaders agreed two weeks ago to share power, with Ghani leading the country for another five years and Abdullah appointed as chief of the peace talks.

Khalilzad described the cease-fire agreement as a “momentous opportunity that should not be missed,” and pressed both sides to agree on a new date to start negotiations.

US Secretary of State Mike Pompeo also urged the two sides to start peace talks, with the release of prisoners as a first step. 

Pompeo said that he expected the Taliban “to adhere to their commitment not to allow released prisoners to return to the battlefield.”

Ghani said the release of Taliban inmates would be “expedited” and that his government’s negotiating team was ready to begin talks “as soon as possible.”

Zabihullah Mujahid, a spokesman for the Taliban, could not be reached for comment on the Taliban’s stance.

In the past, the group has insisted it will take part in talks with Kabul only after all 5,000 Taliban prisoners are freed.

Experts hope the latest developments are a step in the right direction.

“The Taliban do not seem to have any reservations about the structure of the government team, so the hope is high that the talks will take place by June 15,” Wahidullah Ghazikhail, an analyst, told Arab News.

“Some of Taliban’s field commanders seem to be divided on the talks, hoping to capture power again after the departure of US forces (by next spring), while the political leaders are pushing for a political settlement,” he said.