EU leaders issue trade war warning to a bickering US, China

European Union leaders on Friday warned of the damage caused by the ongoing US-China trade dispute to the world economy and urged for rules-based international trade, the media reported.

As the world's Group of 20 economies kicked off their two-day summit in the Japanese port city of Osaka, European Commission President Jean-Claude Juncker said the strained relations between Washington and Beijing over trade were "difficult" and contributing to a slowdown in the global economy.

"We meet at a time when the world economy is encountering uncertainties," Juncker said about the US-China trade war that has overshadowed the summit, with all eyes watching whether the two countries could move towards resolving their issues.

"In our talks with both the US and Chinese authorities … I was drawing their attention to the harmful impact this controversial matter is creating," he said, according to the South China Morning Post.

All countries would struggle to prosper if others did not play by the rules, Juncker added.

European Council President Donald Tusk called on all countries to adopt a more open and liberal stance, saying: "The global stage cannot become an arena … where egotists would dominate in some regimes and nationalistic emotions would dominate over economic terms."

"We came here to defend and promote liberal democracy. Whoever claims liberal democracy is obsolete also claims freedom is obsolete, the rule of law is obsolete, and human rights are obsolete. But in Europe, these are essential and vibrant values."

Tusk said that every country had a responsibility for not only its own interests but a fair and safe world order.

The newspaper had earlier reported that Washington and Beijing "had tentatively agreed to a truce in the dispute" to resume talks aimed at reaching a deal.

A previous 90-day truce had been agreed at December's G20 summit in Buenos Aires.

Details of a truce - which could avert Washington's threatened next round of tariffs on an additional $300 billion of Chinese goods - were being examined ahead of a planned Saturday meeting between US President Donald Trump and his Chinese counterpart Xi Jinping, the daily said.

The US has also pursued a series of World Trade Organisation (WTO) rule changes intended to force China to end "unfair" trading practices.

"We are working closely with the US and Japan, as well as China and others, on reforming the WTO and creating a level playing field," Juncker said. "This can only be done with the G20 as a core group."