President Trump made a mistake in agreeing to a trade truce with China

US President Donald Trump and Chinese President Xi Jinping. Photo: AP

At the G20 Summit held last weekend in Buenos Aires, the two leaders of the US and China agreed not to escalate the trade war and to pause for 90 days without imposing additional tariffs.

The market initially welcomed the deal, but the optimism was short-lived, with some in Beijing and Washington, and even in the White House, suggesting that the two sides would not be able to find common ground within the 90-day period, raising concerns that the tariff war could slow the global economy.

There are more reasons to dislike the deal than the tight time frame, says Adam Triggs. “The deal is a mistake because it weakens the global trading system, it will divert trade from other countries, and it will not reduce the US trade deficit. It is also a mistake because there are real problems in the trading system that the G20 should be discussing.”

Mr Triggs said a multinational organisation like the G20 should be used to agree on a multilateral agreement on issues ranging from the need to remove tariff barriers to the trade of services.

“President Trump’s constant focus on bilateral deals distracts the G20 from the real issues, which can only be solved multilaterally, not bilaterally,” he said.

If President Trump wants President Xi Jinping to address China's unfair trade practices, he should work closely with other US allies to confront Beijing as an alliance, Triggs said.

Additionally, one of the criticisms that experts have leveled at the US-China deal over the weekend is that it lacked specific concessions.

Associate Professor Stephen Nagy of the International Christian University in Tokyo commented that the US and Chinese leaders are interested in this agreement to offset the domestic pressures they are facing, as the trade war heats up.

According to Mr. Nagy, the Trump administration's motivation is more "tactical" with Mr. Trump trying to "gain political advantage as opposition forces have increased over the past few months."

Meanwhile, China has a longer-term goal: It is trying to adjust its strategy to better cope with pressure from the US in the future. Mr. Nagy also commented that after the 90-day truce, trade tensions will continue and even deepen./.