The unfinished trade war between the United States and China would have an impact on world economic growth. Because the projected economic growth this year is lower because of the risks that are negative in nature, namely the escalation of trade tensions, especially between the US and China.
With this condition, world economic growth, which is already 3.5 percent next year, is expected to be better at 3.6. However, the reality will be different if the trade wars between the two countries will continue. So, growth will only reach 3.1 percent.
The US-China Relations Still Has Significant Distance
This is very risky. The US and China still seem to have a significant distance from the leaders, especially from the President of the United States (US) Donald Trump and other state leaders. Moreover, in his remarks, Trump said that they revealed the issue of fair trade and reciprocity.
The importance of enabling level playing fields and no policies are considered unfair. In this case, even the words predatory nations are used that can take advantage of the US economy. This illustrates that in Trump’s concept that there are still countries that are considered to be carrying out practices that are considered detrimental to the United States.
On the other hand, President Xi Jinping considered that this situation was caused by policies that were indeed made by a country so that the desire to be able to create a win-win solution was a function of the desire to improve or create the solution itself or not.
All parties want reforms in the World Trade Organization (WTO). Even though the emphasis is different and the most important thing now is the reform of the WTO regarding its dispute settlement, the mechanism for handling dispute resolution.
Furthermore, it handles various things that are multilateral policies that use a distorted policy. Therefore, for investment and trade issues which are considered part of the economic policies of the countries in the G-20 that can influence the global economy is one of the most important issues, there was no agreement on how to do this so that this would cause uncertainty in the results of the G-20 itself.
Nevertheless, it is still hoped that communication can accommodate that difference in a joint statement of agreement. China says if we want to reach a win-win solution, it can certainly be done as long as both have good intentions to get the solution.
The ongoing trade war between the two big nations is not a simple economic issue. This cannot be dealt with simple settlement as it is in personal injury cases where a plaintiff can expect car accident settlement loans to patch an ongoing personal financial crisis. While these two nations will continue to impose tariffs on both sides and with no third-party intervention to patch this heating case, global economy can suffer soon which is highly dangerous for many countries.