Trump-Xi Deal: A Temporary Agreement Amid Global Competition
The meeting between US President Donald Trump and Chinese leader Xi Jinping in South Korea on Thursday resulted in a year-long truce. Although Trump called the meeting "very remarkable," many see the deal as more of a temporary easing of tensions than a long-term solution to the deep economic problems between the two countries. Both sides prefer to buy time and reduce dependence on each other in strategic sectors.
The deal involves reducing fentanyl tariffs and extending a mutual tariff truce. However, tariffs on many products remain at 47%, considered low enough to keep China's manufacturing base competitive in the global market. China also secured approval to suspend rules that expanded restrictions on Chinese companies listed in the US, as well as agreements on soybean sales and the flow of Chinese rare earths.
However, the deal does not bring about the major structural changes in the lopsided US-China trade relationship that Trump had promised from the outset. For the market, this agreement is seen more as a temporary respite from the ongoing escalation of tensions, rather than a long-term solution to the increasingly intense economic competition.
According to Robert Lighthizer, a former US-China trade negotiator, this agreement is more of a "strategic decoupling," which may only last for a few months or even next year. The market, while hoping for more concrete results, remains unimpressed with the outcome of this meeting, as they were looking for a clearer statement and concrete steps to address global trade uncertainty. (asd)
Source: Newsmaker.id
