US-China Relations: Dousing Trade War Good For Global Economy

International trade experts hold that the cause of the long-lingering and rising US-China economic friction is structural, and as the world’s two largest economies continue their trade war, the impact is bound to be global.

Delays in reaching an agreement have had far reaching consequences – far beyond North America and Asia, to touching all nooks and crannies of the world. The International Monetary Fund (IMF) in a major report published in October 2018 predicted the world’s economy will grow by 3.7 per cent, which is 0.2 points lower than it had estimated in April 2018. That was the same rate of growth as 2017, signaling a slight slowdown. The United States’ trade policies could not have been unconnected to the global growth decline.

The IMF’s World Economic Outlook report concluded: “The forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of US imports from China.” The future can look no bleaker.

However, following the holding of the G20 summit in Argentina early this month, both economic giants – China and USA – decided to ease tensions. President Xi Jinping of China and President Donald Trump...