The US was expected to impose $267 billion worth of new tariffs at the beginning of the month on top of the already $250 billion that he decreed last summer, but this was put off late last year after a 90-day so-called "truce" was reached between the two countries. In the intervening three months, the US and China have apparently made such progress behind the scenes that Trump felt it proper to push back the tariffs once more and even propose a possible meeting with President Xi to conclude an official trade deal.
It remains unclear at this moment exactly what the two sides have agreed upon behind closed dors thus far, but it must have been mutually beneficially otherwise Trump wouldn't have bought more time for the negotiations to continue, nor would China have silently gone along with this. This hints that the system of complex economic interdependency between the two — colloquially resulting in what some have previously called "Chimerica" — is so strong that neither party can afford to break it despite their geopolitical disagreements with one another, of which there are many. Speaking of which, it might even be possible that any forthcoming trade deal between them might also be part of a larger "détente" in their New Cold War.
At this point, a lot of the discussion revolves around proverbially "reading the tea leaves" since factual details are scant but rumors are aplenty, though it's still possible to produce a quality analysis about this topic. The goodwill that must be present in order to extend the trade negotiations might or might not extend to other realms of their bilateral relations, but seeing as how their economic ties are the basis upon which everything else is built, this is nevertheless significant in and of itself. In addition, both sides have pressing domestic reasons behind why they'd want to reach a deal sooner than later; China's economic growth has slowed, while Trump needs a victory to tout before the 2020 elections.
The overall mood is therefore one of cautious optimism, but a lot of work still remains to be done before a trade agreement can be signed between Presidents Trump and Xi.
Andrew Korybko is joined by Adam Garrie, Director of Eurasia Future and Scott Gibbons, author of the book Trapped by History: the Remaking of America and Death of the Middle Class, The Millennial Metropolis: Power Cities in the Age of Trump, and the new book, Trumped by History: The Resurrection of the Great American Middle Class.
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