The summit talks between U.S. President Donald Trump and Chinese President Xi Jinping started
about half an hour ago.
To talk about this in more detail, I'm joined in the studio by the Director for Chinese
Studies at the Sejong Institute, Lee Seong-hyon and our senior business correspondent Kim
Hyesung.
Let's start with you Hyesung, who else is present at this high-stakes meeting and what
have been the sticking points between the two sides so far?
Yes, Soo-young, Participants include Presidents Trump and
Xi, U.S. Trade Representative Robert Lighthizer, U.S. Treasury Secretary Steven Mnuchin, and
Chinese Vice Premier Liu He.
For these trade talks, it's more than just reducing Washington's trade deficit with China,
which was at 420 billion U.S. dollars in 2018.
Over the past months, the two made some progress on services, currency, agriculture and non-tariff
barriers to trade.
It seemed like they were close to reaching a deal until President Trump accused Beijing
of backtracking on previous agreements in May.
The sticking points right now are over how to enforce U.S. intellectual property protection,
prevent forced tech transfers and U.S. demands on China to make structural changes like cutting
subsidies for its state-owned companies.
For China, it doesn't want those changes written into law, saying it would undermine its sovereignty.
It also wants the U.S. to remove tariffs on Chinese imports.
Trump did tell reporters in Osaka Friday that he expects a productive discussion with Xi.
But the differences between the two sides are big, it's more like a tech war over who
will dominate future high-tech industries.
Take a listen to what President Trump said at his G20 opening speech on Friday.
"We must also ensure the resilience and security of our 5G networks.
This is essential to our shared safety and prosperity,
Thanks, Hye-sung for bringing us up to speed.
Well, U.S. Treasury Secretary Steven Mnuchin projected some optimism ahead of the summit,
saying the deal is 90 percent complete... but then Mr. Trump said he's prepared to impose
extra tariffs if the talks fail.
So we're getting mixed signals.
So my question to you, director is, whether you see a conclusive deal coming out
of that meeting?
Right, the rest of the world has been
affected by this months-long dispute.
Particularly South Korea, which has been treading on eggshells, weighing the demands of its
top security ally, the United States, and its top trading partner, China.
What has the impact been like on the global economy and on South Korea?
So far, the two sides have imposed tariffs worth a total of 360 billion U.S. dollars
on one another.
That of course, impacts U.S. and Chinese consumers who are hit by higher prices.
But all this uncertainty has stirred up stock market volatility.
It even wiped one trillion dollars off the global stock market a single day.
It also disrupts the global supply chains, hurtting production and lowering investment.
For a figure, the IMF said current and threatened U.S.-China tariffs could cut global GDP for
next year by zero-point-five percent or 455 billion dollars, a loss larger than G20 member
South Africa's annual economic output.
The IMF says South Korea, with export accounting for half of its GDP, is most vulnerable to
the trade war, followed by Germany and Japan.
In fact, South Korea's exports have fallen for seven straight months amid slowing global
trade, and a report by the Korea International Trade Association says U.S. tariffs on China
could lower South Korea's exports by point-14 percent.
But then it's not just trade, President Trump's blacklisting of Chinese tech firms like Huawei
also creates a tricky situation for local companies, like Samsung Electronics and SK
Hynix, that export chips to Huawei.
I'm sure Doctor Lee who just came back from a tour of Huawei's HQ in Shenzhen knows the
situation better.
What was the mood in China, and how is this trade spat affecting South Korean companies?
Since the trade dispute, businesses not only in China and America but around the world
have been shifting their supply chains, production lines and their long-term strategies amid
the uncertainty.
Even with a
deal
between Trump and Xi, it's clear things won't be the same.
What
will change?
Even if we see
a deal,... beneath the surface of the trade war, the two countries are engaged in a power
struggle,... and their respective visions for their countries,... Xi with his Made in
China plan for 2025 and Trump's pledge to restore American greatness.
Is a compromise even possible?
Can there be positive sum game?