US and China approach possible olive branch moment

China will be watching the outcome of the US midterm elections with a hawk’s eye after it was announced that the administrations of Donald Trump and Xi Jinping will be holding high-level security talks the day after polls have closed.

Early state-by-state stats showed the Democrats possibly coming up trumps with the 20-odd seats required to gain ascendancy in the House of Representatives.

In early indications that the Republicans are preparing themselves for running an administration that’s compromised by a Democrat midterm victory, Trump displayed unusual willingness to ease months of tension that have built up around the penalties his government has imposed on China, with resulting tariff reciprocity.

Having expressed confidence that a deal is possible between America and its largest global trade partner, Trump seems to be tactically manoeuvring into a position that will suit both houses of Congress.

Although the lower house will likely become Democrat, the Republicans are expected to maintain their slim two-seat control of the Senate.

Wednesday’s talks will be held in Washington and will be attended by US Secretary of State Mike Pompeo, Defence Secretary Jim Mattis, Chinese politburo member Yang Jiechi, and Chinese Defence Minister Wei Fenghe.

China has already said it’s hopeful that the talks will bring about resolution of differences that have led to the current tariff stand-off.

Chinese Vice President Wang Qishan said his country was “ready to have discussions with the US on issues of mutual concern and work for a solution on trade acceptable to both sides”.

However, one of the Trump administration’s leading justifications for its tariff toughness has been concern over industrial intelligence, purportedly compromised in China where companies, including those originating in the US, are subjected to local scrutiny.

Despite tomorrow’s talks being touted as security discussions, these concerns remain largely unaddressed.

For the moment though, Trump’s administration appears to be suddenly forgiving of what it has previously called, “China’s unfair trade security impositions”.

That could all change if the fat lady serenades the Republicans which, as polls started to open, seemed unlikely.

More News