00:00Well, Jeff Moon is a former assistant U.S. trade representative for China.
00:05I think they're going to cover the full range of economic issues.
00:08They're going to share their updated views on what's happening in a very rapidly developing situation.
00:13I think it's important for them to identify red lines and their top priorities.
00:18They'll probably suggest possible areas for agreement, but they're not developing a script.
00:25Rather, they are developing possibilities for the leaders to then approve and apply.
00:31They will talk about a trade truce.
00:33I think they will reach a truce.
00:35There will be talk about tariff reductions, and I think that it's possible that tariff reductions will come into place.
00:41After all, they committed to that during the last summit.
00:44I think China wants access to American technologies and possibly investment in the U.S., which is why CEOs will
00:51come along.
00:52The Americans want a brief truce.
00:55China would like for the truce to go to the end of Trump's term.
00:58I think the Americans may head for, say, six months to preserve a little bit of leverage.
01:03Top priority for the U.S. is critical minerals.
01:06The U.S. doesn't think China has lived up to its critical minerals agreement during the last summit.
01:13Chinese purchases of American goods are a perennial priority, and China doesn't frequently deliver on its purchase commitments, although it
01:21has on agriculture recently.
01:24Most notably, what they are not discussing is what's at the heart of the dispute in the relationship, which is
01:31industrial policy.
01:32That apparently has been shelved, and very unfortunately, that means that the friction will continue into the indefinite future.
01:40It seems, as you said, stability is important for both sides at the moment.
01:44Do you think that there is the danger of all-out trade war breaking out again?
01:50I think it's unlikely, and I think both sides realize that that level of disruption is extremely unhelpful.
01:57I think that Trump realizes that he is stalemated and that tariffs are a very limited mechanism that he can
02:04apply directly to the Chinese.
02:06What he is doing instead, instead of fighting a direct trade war, he is trying to indirectly prevent those Chinese
02:14efforts to circumvent his tariffs by shipping them through third countries.
02:18And so there is a trade task force that's been established.
02:21There is increasing pressure on those third countries not to permit that kind of circumvention.
02:27There are major discussions in the U.S.-Mexico-Canada agreement, discussions about rules of origin to prevent that kind of
02:35circumvention.
02:36So the nature of the trade war is continuing, but the nature of it is changing.
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