US President Donald Trump and Chinese President Xi Jinping arrive at a state dinner at the Great Hall of the People in Beijing on Nov. 9, 2017. Trump is on a 10-day trip to Asia.
The continuing trade war has brought about global economic uncertainties. Many are awaiting good results from the meeting between US President Donald Trump and Chinese President Xi Jinping at the G20 Osaka Summit in Japan.
JAKARTA, KOMPAS— The world is looking ahead, albeit with bated breath, to the meeting later this week between Donald Trump and Xi Jinping in Osaka, Japan. The meeting, which is being held on the sidelines of the G20 Summit, is expected to ease tensions in the trade war between the world’s two largest economies.
The tug-of-war in the ongoing Sino-American trade war has led to global economic uncertainties, including in global trade and growth.
Chief economist Enrico Tanuwidjaja of Bank UOB Indonesia said in Jakarta on Tuesday (25/6/2019) that the world hoped the meeting would bring good tidings, “whether in the form of tariff agreements or a ceasefire”.
Bank Indonesia (BI) Governor Perry Warjiyo said at the central bank on Monday (24/6) that no one could predict the extent of the global uncertainties the trade war had created. This was exactly why many were pinning their hopes on the Trump-Xi meeting. “Will the meeting lead to a resolution in trade tensions?” said Perry.
The central bank, like many other central banks and leading financial institutions in the world, has considered several scenarios for the trade war and their effects on the global economy. The World Bank and the International Monetary Fund has also named the Sino-American trade war as an economic growth risk this year.
Hope
Chinese Foreign Ministry spokesperson Geng Shuang said in Beijing on Tuesday that there was hope that the meeting would ease tensions between the two major powers. In preparations for the meeting, US trade representative Robert Lighthizer has spoken by phone with China’s key negotiator, Deputy Prime Minister Liu He.
“We hope that the meeting will help the two countries rebuild their mutual trust and resolve differences and several other extraordinary problems we are facing right now,” said Geng.
Geng reaffirmed that China would honor its commitment to cooperating with the US. Beijing would remain firm in its stance of developing Sino-American relations on clear coordination and mutual benefits.
If it comes to pass, the Osaka meeting will serve as the first opportunity for Trump and Xi to discuss trade issues since the former stated his intention to impose import tariffs on Chinese goods worth
US$300 billion. This would mean that Washington could potentially impose tariffs on all exported goods from China.
AP PHOTO/PABLO MARTINEZ MONSIVAIS, FILE
US President Donald Trump (second right) meets with Chinese President Xi Jinping (left) during their bilateral meeting at the G20 Summit in Buenos Aires, Argentina, in this file photo dated 1 Dec. 2018. Many countries around the world are hoping for an easing of tensions in the Sino-American trade war when the leaders of the two major powers meet later this week on the sidelines of the G20 Summit in Osaka, Japan.
Most recently, Trump has slapped a 25 percent tariff on US$250 billion of Chinese goods. China then retaliated by slapping an equal tariff on American goods. The 11 rounds of negotiations thus far have ended in a stalemate.
Possibilities
UOB Indonesia’s Enrico said that it was entirely possible that the Trump-Xi meeting in Osaka would not produce any positive results. It was also possible that the US would subsequently increase tariffs on other Chinese goods. “If this occurs, Indonesian goods that are exported to China for production needs will be affected,” he said.
BI Deputy Governor Dody Budi Waluyo said that the Sino-American trade war might drag on after the Osaka meeting. In such an event, the US and China would have to rely on domestic demand and consumption to drive their economies.
Perry said that the central bank had projected global economic growth of 3.3 percent for May and June.
“However, if the US imposes a hike in import tariff from 10 percent to 25 percent on US$200 billion worth of Chinese goods, this year’s projection might also change to 3.1 percent,” he said.
Separately, World Bank Indonesia country director Rodrigo A. Chaves advised President Joko “Jokowi” Widodo on Tuesday at the State Palace in Jakarta that the global economic uncertainties ensuing from the Sino-American trade war would continue. He suggested the Indonesian government to be on the alert to avoid negative effects on the national economy.
AF/AARON FAVILA
Environmental activists in Pikachu costumes hold a rally on Tuesday, 25 June 2019, at the Japanese embassy in Manila, the Philippines. The group is calling on Japan to stop financing coal as it prepares to host the G20 leaders summit in Osaka on 28-29 June 2019.
“We believe that the government must carefully observe what is happening in the global economy right now. Dark clouds hang low due to the trade war,” Chaves said after the meeting.
President Jokowi and several Cabinet ministers met with representatives of World Bank Indonesia. The government had asked the bank for its input on managing the country’s economy, especially over the next five years.
Chaves said the bank was hoping for good results from the Sino-American meeting. (NTA/IDR/AP/BEN)
