Trump-Xi meeting at G20 raises hope for trade truce

Xinhua said Trump requested the call. (File/AFP)
Updated 19 June 2019

Trump-Xi meeting at G20 raises hope for trade truce

  • Chinese president said the problems between US and China won’t benefit either sides
  • US and China raised tariffs on some of each other’s goods and companies

WASHINGTON: US President Donald Trump and Chinese leader Xi Jinping have agreed to meet at the G20 summit in Japan next week, raising hopes for a truce in the bruising trade war between the world’s top two economies.
The two leaders spoke on the phone on Tuesday, weeks after negotiations broke down when Trump accused Beijing of reneging on its commitments, hiked tariffs on $200 billion in Chinese goods and then blacklisted Chinese telecom giant Huawei.
The US president took a conciliatory approach this time.
“Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan,” Trump said on Twitter.
“Our respective teams will begin talks prior to our meeting,” he said ahead of the June 28-29 summit.
Xi noted that bilateral relations had encountered difficulties that were “not in the interest of either side” but he warned that dialogue must be conducted on “an equal footing.”
“China and the US will both gain by cooperating and lose by fighting,” Xi told Trump, according to state media.
Global shares were buoyed by the announcement, with Wall Street rallying on Tuesday and Asian stock markets surging on Wednesday.
The White House readout of the call said the leaders “discussed the importance of leveling the playing field for US farmers, workers, and businesses through a fair and reciprocal economic relationship.”
“I think we have a chance. China wants a deal. They don’t like the tariffs,” Trump told reporters at the White House. “I have a very good relationship with president Xi. We’ll see what happens.”
The White House repeated that the focus of the talks will be to address “structural barriers to trade with China and achieving meaningful reforms that are enforceable and verifiable.”
The United States and China seemed close to an agreement when talks collapsed last month.
Beijing retaliated to Trump’s tariffs and moves against Huawei by increasing custom taxes on $60 billion in US goods, creating its own list of “unreliable” companies and individuals and threatening to ban exports of rare earths to the United States.
Xi told Trump that the two countries must “accommodate each other’s legitimate concerns” and that “China hopes the US side can treat Chinese firms in a fair manner,” according to the official Xinhua news agency.
Trump had requested the call between the two leaders, according to Xinhua.
A week before the G20, Xi will visit North Korea on Thursday and Friday, his first trip there as president.
China is North Korea’s sole major ally, and analysts say Xi could use any leverage Beijing may have in the nuclear standoff between Washington and Pyongyang as a “bargaining chip” in his talks with Trump.
Trump economic adviser Larry Kudlow warned that there are “no guarantees” of any resolution in Osaka, Japan.
“Our position continues to be (that) we want structural changes,” Kudlow told reporters.
“They’ll have a good conversation. The fact that they’re meeting is a good thing.”
In an editorial, the state-run China Daily said Communist Party decision-makers, like White House counter-parts, “want to evade a full-blown trade war.”
“Since neither side appears ready to really slam the door shut on further negotiations, they should refrain from escalating tensions, and engage each other in a more constructive manner,” the daily said.
Global markets are concerned about Trump’s threat to impose more steep tariffs on an additional $300 billion in Chinese imports, which could hurt the already slowing Chinese economy and spread the gloom worldwide.
Trump last week threatened to “immediately” jack up tariffs should Xi fail to show up at the meeting. The United States already has 25 percent duties on more than $250 billion of imports from China.


EU leaders split over $1.2 trillion post-Brexit budget

Updated 18 October 2019

EU leaders split over $1.2 trillion post-Brexit budget

  • Under a proposal prepared by Finland, the next long-term budget should have a financial capacity between 1.03% and 1.08% of the EU GNI, a measure of output
  • After the meeting, some EU leaders and officials described the talks as difficult

BRUSSELS: European Union leaders discussed a new budget plan on Friday that could allow the EU to spend up to 1.1 trillion euros ($1.2 trillion) in the 2021-2027 period, but deep divisions among governments may block a deal for months.
Under a proposal prepared by Finland, which holds the EU’s rotating presidency, the next long-term budget should have a financial capacity between 1.03% and 1.08% of the EU gross national income (GNI), a measure of output.
That would allow the EU to spend 1 trillion to 1.1 trillion euros for seven years in its first budget after the departure of Britain, one of the top contributors to EU coffers.
After the meeting, some EU leaders and officials described the talks as difficult.
The Finnish document, seen by Reuters, is less ambitious than proposals put forward by the European Commission, the EU executive, which is seeking a budget worth 1.1% of GNI. The EU parliament called for an even bigger budget, 1.3% of GNI.
But the Finnish proposal moves beyond a 1% cap set by Germany, the largest EU economy. And it has displeased most of the 27 EU states, EU officials said, suggesting long negotiations before a compromise can be reached.
Talks on budgets are usually among the most divisive in an EU increasingly prone to quarrels. The member states are deeply split over economic policies, financial reforms and how to handle migrants.

DEEP SPLIT
The Finnish proposal, which cuts spending on farmers and poorer regions, has managed to unite the divided EU leaders in their criticism.
“The text has caused nearly unanimous dissatisfaction,” a diplomat involved in the talks said.
New, expensive policies, such as protecting its borders and increasing social security, have been enacted, but states are reluctant to pay more.
Germany and other Nordic supporters of a smaller budget argue that because of Brexit, they would pay more into the EU even with a 1% cap because they would need to compensate for the loss of Britain.
Eastern and southern states, who benefit from EU funds on poorer regions and agriculture, want a bigger budget and are not happy with Finland’s proposed cuts on these sectors.
Under the proposal, subsidies to poor regions would drop to less than 30% of the budget from 34% now. Aid to farmers would fall to slightly more than 30% from over 35% of the total.
To complicate matters, the new budget should also include rules that would suspend funding to member states with rule-of-law shortcomings, such as limits on media freedom or curbs on the independence of judges.
This is irking states like Poland and Hungary, which Brussels has accused of breaches in the rule of law after judiciary and media reforms adopted by their right-wing governments.
Friday’s meeting was not supposed to find a compromise, but divisions are so deep that many officials fear a deal may not be reached by a self-imposed December deadline. A later deal would delay the launch of spending programs.
The Finns remained confident, however, and insist their suggested spending range would eventually be backed by EU states. “The fact that almost everybody is against our text shows we have put forward a fair proposal,” one diplomat said.