The Trump-Xi Meeting Isn't Just About Economics

If it were only about economics, the outcome of the meeting between Presidents Donald Trump and Xi Jinping on the sidelines of the Group of 20 Summit in Argentina on Saturday would be a lot easier to predict: an immediate easing of trade tensions as a step toward reaching concrete agreements down the road. But, as the dispute between the world’s two largest economies has worsened, the trade issue has evolved beyond economics to encompass broader domestic policy and national security issues.

Although there is a long list of economic and political issues that are of both immediate and longer-term relevance to the health of the world, the main focus for this G-20 meeting is on the dinner meeting between Trump and Xi. A positive resolution of the trade spat would lift a major stagflationary cloud over the global economy that has weakened financial markets. Such an outcome would address some longstanding non-tariff practices and help deliver free but fairer trade for the global economy as a whole. The opposite outcome would pull the rug out from under an already weakening and more divergent global economy, while also increasing the risk of market instability.