To anyone expecting a major breakthrough at the June 28-29 Osaka G-20 meeting, Wilbur Ross has a simple message: "Don't."
Speaking to the WSJ, US Commerce Secretary Wilbur Ross sharply played down prospects of a "major" trade deal if President Trump and China’s President Xi Jinping meet at the Group of 20 summit in Japan later this month (which they very well may not as Xi has yet to commit to a meeting which would show him at a power disadvantage to Trump), but nonetheless he said he believes the two sides will ultimately get back to negotiations.
"I think the most that will come out of the G-20 might be an agreement to actively resume talks,” Ross said in a phone interview Sunday. “At the presidential level they’re not going to talk about the details of how do you enforce a trade agreement."
So what is the best case scenario? Well: a return to square one, such diplomatic relations are now well in negative territory: “The most that might come is new ground rules for discussion and some sort of schedule for when detailed technical talks might resume,” said Mr. Ross.
Ross called in from the Paris Air Show, where the US aerospace industry is grappling with the fallout of the four-month grounding of the Boeing 737 Max airliner, not to mention global trade tensions that have darkened the outlook for many businesses. The aerospace execs present are also closely watching developments in the U.S.-China trade talks, which U.S. officials said were nearing a deal before the talks reached an impasse last month.
Ross' attempt to sooth over the situation, left much to be desiredL “Even real shooting wars end with negotiation, and this will ultimately end in negotiations,” Mr. Ross said. “Whether that will be in 10 minutes, 10 weeks, 10 months or longer, it’s not possible to judge.” Hopefully it won't be 10 years.
Meanwhile, D-Day draws near: seven days of hearings begin Monday in Washington during which businesses and other stakeholders will weigh in on the newest proposed tariffs, and businesses will then have an additional week—until July 2—to provide comment. After that, the U.S. can consider the feedback and act.
But before tariffs take effect, Trump and Xi may meet at the annual G-20 summit of the world’s leading economies, which will be held June 28-29 in Osaka, Japan. The problem is that the meeting between the two presidents hasn't been formally arranged yet, but the U.S. has indicated it wants to hold the meeting and is likely to take further action if China does not agree to the meeting. Of course, Trump put Xi in another position of weakness saying that if the Chinese president does not show up, then the tariffs go up automatically. As such, compliance with Trump's demand will be seen as weakness by the most powerful Chinese president in decades, and virtually assures that no such meeting will take place, and instead tit-for-tat escalation will be the norm.
As for the US? Well, they are blaming China of course: Ross said Washington would continue to push for trade terms more favorable to the U.S. and urged Beijing to return to the negotiating table.
"The Chinese are the ones who precipitated the crisis, they’re the ones that will have to end it by letting us know we’ll go back to where we were."
In short: no deal.