Kevin Rudd

China and the US have perhaps their last chance to end the trade war. Otherwise, get ready for global economic turmoil

Both countries claim the other is hurting more, but both clearly have an interest in ending the trade war by 2020. If they fail, nationalist sentiment may make a resolution impossible, which would have stark consequences for everyone

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Why you can trust SCMP

Kevin Rudd

Published: 1:00am, 9 Oct 2019Updated: 4:22am, 9 Oct 2019

Now that the celebrations marking the 70th anniversary of the founding of the People’s Republic of China are over, it is time to direct attention back to the Sino-American trade war. That conflict may well be about to enter its endgame.

Indeed, the next round of negotiations could be the last real chance to find a way through the trade, technology and wider economic imbroglio that has been engulfing both countries.

Failing that, the world should start preparing for its rockiest economic ride since the 2008 global financial crisis. There is a real risk that America will slide into recession, and that the global economy will experience a broader decoupling that will poison the well for Sino-American relations far into the future.

Thus far, the trade war has gone through four phases. Phase one began last March, when US President Donald Trump announced the first round of import tariffs on Chinese goods. Phase two arrived with the “Argentine reset” at the G20 summit in Buenos Aires last December, when Trump and Chinese President Xi Jinping announced that they would conclude an agreement within 90 days.

That truce imploded in early May of this year, with each side accusing the other of demanding major last-minute changes to the draft agreement.