Trump, Xi spark another stand-off with world economy at risk

Both US and China claim onus is on the other side to take the next steps

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US President Donald Trump and Chinese President Xi Jinping at a bilateral meeting during the G-20 leaders' summit in Osaka in 2019, during Mr Trump's first term. The US leader, who is seeking to keep an October meeting between both leaders on track, has signalled openness to doing a deal with Beijing.

(PHOTO: REUTERS)

US President Donald Trump and Chinese leader Xi Jinping’s latest tit-for-tat showdown reached a standoff on Oct 13, with both countries claiming the ball was now in the other’s court.

After Mr Trump signalled openness to doing a deal with Beijing, US Vice-President J.D. Vance on Oct 12 declared the outcome would “depend on how the Chinese respond”.

Hours later, China’s Foreign Ministry made clear Beijing would take its cues from Washington’s next steps, after having already unleashed what it saw as retaliatory actions.

“If the US continues on its wrong course, China will firmly take necessary measures to safeguard its legitimate rights and interests,” Foreign Ministry spokesman Lin Jian said at a regular briefing in Beijing.

Chinese authorities have not yet retaliated against Mr Trump’s threat to impose 100 per cent tariffs over their latest rare earth curbs, with the levies not formally written into policy.

China’s markets showed resilience to the turmoil. The CSI 300 benchmark for onshore shares ended on Oct 13 down just 0.5 per cent, suggesting that investors see renewed tensions as strategic posturing. Futures indicate US stocks are also set to recoup some losses from the Oct 10 selloff after Mr Trump softened his tone.