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 ‘The entire world is worried’: US-China tensions at global summit spark fears

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PostSubject: ‘The entire world is worried’: US-China tensions at global summit spark fears   ‘The entire world is worried’: US-China tensions at global summit spark fears EmptyMon 19 Nov 2018, 5:52 pm

“The entire world is worried.”

That was Papua New Guinea Prime Minister Peter O’Neill’s grim statement at the end of a summit of world leaders yesterday.

The two-day APEC gathering, which took place over the weekend on the Pacific island, was marred by tensions between the US and China.

For the first time in the summit’s 26-year history, regional leaders failed to issue a formal joint statement, with Mr O’Neill saying “the two big giants in the room” had been unable to agree.

And all the while, Australia sits in an awkward position.


The bickering between the US and China was largely over trade differences, which for months have been building alongside a multi-billion dollar trade war.

Chinese leader Xi Jinping has urged the world to pursue free trade policies.

In a series of veiled swipes, Mr Xi criticised the Trump administration’s foreign policy in a Saturday speech to regional business leaders, saying it would never work in the long run.

“Attempts to erect barriers and cut close economic ties work against the laws of economics and the trends of history,” he said. “This is a shortsighted approach and it is doomed to fail.

“We should say no to protectionism and unilateralism.”

US Vice President Mike Pence — who attended on US President Donald Trump’s behalf — later retaliated saying he was prepared to “more than double” the tariffs imposed on Chinese goods.

Mr Pence also slammed the rising superpower’s Belt and Road initiative, warning smaller countries against the “staggering debt” they would face from its loans.

He instead urged them to work with the US, saying it did not “coerce, corrupt or compromise your independence”.

Mr Xi insisted there was no “hidden agenda” to the scheme.

READ MORE: Inside China’s Belt and Road scheme

The US and China have become embroiled in a trade war that experts warn could be catastrophic for the global economy, with the world’s top two powers going head to head.

The pair has imposed tariffs worth billions of dollars of each other’s goods and there is little sign of an immediate easing in tensions. Both sides have threatened to step up action if necessary.

Mr O’Neill noted the World Trade Organisation was one of the main issues preventing agreement, but said it was outside APEC’s remit.

“APEC has got no charter over World Trade Organisation, that is a fact,” he said. “Those matters can be raised at the World Trade Organisation.”

Mr Xi said the world should “uphold the WTO-centred multilateral trading system, make economic globalisation more open, inclusive, balanced and beneficial to all”.

With concerns growing that rivalry between the US and China could escalate, Mr Xi warned against going down that road.


Australia continues to walk a fine line between China, its largest trading partner, and the US, its long-term security ally.

But Prime Minister Scott Morrison attempted to play down tensions on the back of the summit.

“I think there is a lot more pragmatism going on here than people have been prepared to acknowledge in the commentary,” Mr Morrison told reporters in Port Moresby on Sunday.

“There’s a lot of movement under the water.”

He said the growing trade war between the two powers was hurting global economic growth, but he believed both sides wanted to find a resolution.

“I think they’re fully aware, because these things also impact their economies,” he said.

Australia and the US will jointly host a naval base on Manus Island, creating a new staging point into the contested South China Sea.

Mr Morrison would not confirm how much the expanded Lombrum naval base would cost, but said Australia was there at the invitation of the PNG government.

He had a brief but “warm” meeting with Mr Xi on Saturday night, but the naval base did not come up.

“We were focused on our relationship and what we were doing together,” Mr Morrison said.


Over the past six months, the US and China have been gradually upping the stakes in a growing trade war.

All in all, $US360 billion worth of goods has been subject to duties.

In June, the White House announced plans to stick 25 per cent tariffs on 1100 Chinese goods.

Beijing vowed to retaliate with the same value: 25 per cent tariffs on US products worth $US34 billion per year, including soybeans, seafood and crude oil.

The first round came into effect on July 6. It was in part a product of tensions that had been building between China and the US on a range of issues, from trade to America’s military presence in the South China Sea, which Beijing has repeatedly threatened them on.

In September, following Mr Trump’s decision to raise tariffs on $200 billion of Chinese imports, the Chinese Communist Party announced it would levy tariffs on $US60 billion ($AU83 billion) worth of American goods.

The second round came into effect on September 24.

Earlier this month, it was reported that Mr Trump was beginning to thaw on his hardline stance.

Talks between the two countries restarted, and the more hawkish economic figureheads of the Trump administration were sidelined.

According to CNBC, Peter Navarro — one of Mr Trump’s most anti-China trade advisers — was sidelined for talks with the Chinese leader.

Mr Trump and Mr Xi held a phone call on November 1 — their first major contact in weeks.

But according to Bloomberg, Mr Trump is readying tariffs on all remaining Chinese goods coming into the US.

The President could ready tarifs on a further $US257 billion worth of Chinese goods, in a move that could be officially announced as early as December.

The final list would largely hit consumer productsa nd capital goods, which have so far been spared by the Trump administration.

Judging by this — coupled with the end result of the APEC summit — there’s still a long way to go.
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