G20 summit, the end of the trade war?

As the world leaders gather for the G20 summit in Osaka. One agenda topic looms at the top of everyone's mind, the ongoing trade war between the US and China. So will the meeting between President Trump and President Xi herald in a trade deal? I would totally think so.

Both US and China are trying to portray a tough side to the trade war by saying that they can outlast the competition but time is of the essence here.

President Trump has just launched his reelection campaign and at the back of his mind, only two things can happen. It is either he wins or he loses the reelection bid. If he loses the reelection bid, his successor will definitely blame him for leaving a mess for him or her to clear.

Even if President Trump wins the reelection campaign, he will experience alot of pain during the presidential bid for the prolonged trade war. President Trump contrary to the popular belief is a totally rational man. He is a businessman at heart and would definitely want to cut the best deal possible.

For President Xi, the social compact or contract between the Chinese Communist Party (CCP) is that you enrich the people and the people will give you the mandate to rule. In China, the flight of capital is a real thing as firms relocate predominantly to Vietnam and Indonesia to avoid paying the tariffs. This is causing pain for the CCP as unemployment and unrest are raising.

Hence, as President Trump and President Xi meet in Osaka this week, we all know that behind all the smiles and handshakes, there is a genuine urgency to reach a deal.

Everyone will emerge from Osaka as a winner having escalated the trade war to the highest point and thereby convinced that they are getting the best deal possible.

While China has the nuclear option of selling off all US debt in a short span of time. It is the US hegemony and control over the world economy that makes this option unlikely for now.

Again we have time to thank for the end of the trade war. President Trump is pressured by his reelection campaign and President Xi needs to bring home the bacon to maintain his mandate to rule. World peace.

Until I blog again. Have a nice day :) let's keep on moving towards good.