WASHINGTON - American businesses are bracing for a painful escalation in President Donald Trump's trade war with China.
Yet they might just get a reprieve.
If history repeats itself - and most analysts are betting it will - Trump and President Xi Jinping will agree to some kind of cease-fire when they meet late this week at a Group of 20 international summit in Osaka, Japan.
Indeed, a senior administration official sought to downplay expectations Tuesday by suggesting that the primary goal for the Trump-Xi meeting is simply an agreement to restart negotiations. The official, who spoke on condition of anonymity, said the hard work of finalizing the complex details of any broad new accord would come later, when negotiating teams for the two sides meet.
Under the cease-fire scenario, the two sides' existing tariffs and counter-tariffs on many of each other's goods would remain in place. But no additional import taxes would take effect. This would buy time for U.S. and Chinese officials to restart talks that stalled last month after 11 rounds of negotiations.
The last time Trump and Xi met - in early December at a G-20 gathering in Buenos Aires, Argentina - they called a truce. That cease-fire injected some new momentum into the talks between the world's two biggest economies.
"Ideally, results at this summit could match the last summit in Argentina," said Tu Xinquan, director of the Institute for WTO Studies at the University of International Business and Economics in Beijing. "That is, to prevent the trade war from escalating."
The stakes are even higher now. Trump has ordered U.S. Trade Representative Robert Lighthizer to prepare import taxes on $300 billion in Chinese goods - which would extend U.S. tariffs to everything China ships to the United States. The administration has already imposed 25% tariffs on $250 billion in Chinese imports. Beijing has retaliated by taxing $110 billion in goods from the United States.
"What I'm hoping is that two leaders will recommit to fully engage on the trade talks," said Myron Brilliant, head of international affairs at the U.S. Chamber of Commerce, a traditional Republican ally that has been sharply critical of Trump's use of tariffs. "There's too much at stake in the bilateral relationship for the two governments not to try to work out the final parts of the trade agreement."
The administration accuses Beijing of using predatory tactics in a pell-mell push to give Chinese companies an unfair competitive edge in such advanced technologies as artificial intelligence and driverless cars. Beijing denies the charges and contends that the administration is simply trying to suppress a rising competitor in global trade.