Not for the first time since Donald Trump was elected to the White House, his administration has declared that jaw-jaw with China is better than war-war as far as trade conflict is concerned. Mr Trump’s much-anticipated meeting with President Xi Jinping over the weekend led to a postponement of planned tariff increases on Chinese goods and a pledge to work to lower trade tensions.
It sounds good. Since the beginning of Mr Trump’s presidency, the US-China conflict has threatened to drag the whole world economy into a vortex of disruption. Anything that leads to a peaceful resolution is welcome.
The deal announced by Mr Trump and Mr Xi, if it holds, will be a relief. But a great deal of scepticism is required that a back-of-the-envelope deal — whose meaning the two sides are already disputing — is likely to bridge such a huge gap. Ceasefires between the two have been announced and rapidly broken down before. In the meantime, any companies dealing across the two economies can do little except wait and hope that their businesses remain intact, and prepare contingency plans if the agreement breaks down.