Trump, Xi buy time in trade war
WASHINGTON >> The dinner-table diplomacy that Presidents Donald Trump and Xi Jinping of China conducted over the weekend produced something as vague as it was valuable: an agreement to keep talking.
Forged over grilled sirloin at the Group of 20 summit Saturday in Buenos Aires, Argentina, the ceasefire Trump and Xi agreed to Saturday night illustrated that the leaders of the world’s two largest economies can at least find some common ground, however tentative and ill-defined it might be. The truce pulled the United States and China back from an escalating trade war that was threatening world economic growth and had set global investors on edge.
“The prospects for real progress on substantive issues with China are now better than at any point in the Trump administration,” said Andy Rothman, investment strategist at Matthews Asia.
What Trump and Xi achieved was the gift of additional time — 90 days, at least — to try to resolve the thorny and complicated issues that divide them. Most important among them, and perhaps the most intractable, is the U.S. argument that Beijing has deployed predatory tactics in a headlong drive to overtake America’s global supremacy in high technology.
Yet reaching a permanent peace will hardly be easy. The Trump administration asserts, and many experts agree, that China systematically steals trade secrets and forces the U.S. and other foreign countries to hand over sensitive technology as the price of admission to the vast Chinese market.
Washington also regards Beijing’s ambitious long-term development plan, “Made in China 2025,” as a scheme to dominate such fields as robotics and electric vehicles by unfairly subsidizing Chinese companies and discriminating against foreign competitors.
This year, Trump imposed an import tax of 25 percent on $50 billion in products, then hit an additional $200 billion worth of goods with 10 percent tariffs. Those 10 percent tariffs were scheduled to ratchet up to 25 percent on Jan. 1 if the United States and China failed to reach an agreement to at least postpone that move.
In Buenos Aires, they did reach such an accord. Trump agreed to delay the scheduled U.S. tariff increase for 90 days while the two sides negotiate over the administration’s technology-related complaints. In return, China agreed to buy what the White House called a “not yet agreed upon, but very substantial” amount of U.S. products to help narrow America’s gaping trade deficit with China. If the Chinese did eventually increase such purchases, it would be warmly welcomed in the U.S. Farm Belt, where producers of soybeans and other crops have been hurt by Beijing’s retaliatory tariffs.
But can China be trusted? Its contentious tech policies lie at the heart of its economic vision, and Beijing could prove reluctant to sacrifice its ambition, no matter what longer-term agreement with the United States it eventually reaches.