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Opinion | Trade truce is a win-win – but it’s probably a temporary calm before the next storm
- Latest ceasefire agreed by Donald Trump and Xi Jinping should be welcomed, since an all-out trade war would spell disaster for the global economy
- But US president’s tough policy on China is gaining support at home, and Beijing is unlikely to ever agree to overhaul its trade and industrial policy
Reading Time:4 minutes
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“If you want peace, prepare for war,” advised Roman military strategist Vegetius.
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And in many ways, one should understand US President Donald Trump’s trade war against China in similar terms. In Trump’s own words: “You can never show weakness. You’ve got to project strength.”
A rising China, however, is demanding nothing less than absolute equality, so strategic acquiescence seems out of the question.
Nonetheless, we should welcome the latest ceasefire, no matter how fragile or transient, following talks between Trump and Chinese President Xi Jinping on Saturday. This is a perfect opportunity to forestall an ineluctable march towards global catastrophe.
As expected, Trump settled for a temporary trade war truce with Xi during their meeting on the sidelines of the Group of 20 summit in Osaka. Trade negotiations are back on track and additional tariffs have been put on hold.
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Most importantly, Trump signalled a partial relaxation of sanctions against Huawei Technologies, which has faced an almost existential threat in recent months. The Chinese telecoms giant will soon be allowed to start buying advanced technology from Silicon Valley again, including from software companies such as Google as well as hardware producers like Intel and Micron Technology.
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