U.S.-China showdown expected at G-20 meeting
WASHINGTON — After months of growing friction and escalating tariffs, President Donald Trump will meet this weekend in Argentina with Chinese President Xi Jinping in a face-off that could prove pivotal not only for U.S. businesses and consumers, but also for the global economy and increasingly fragile international order.
The private dinner Saturday between the leaders of the world’s two largest economies is likely to overshadow the Group of 20 summit in Buenos Aires, which begins Friday, and will focus on such matters as sustainable development and work in the digital age.
Over the last year, the United States and China have exchanged volleys of punitive tariffs that now amount to a substantial tax on half of all Chinese imports to America, and most of American exports to China.
Unless China caves in to his demands, Trump is threatening to boost the tariffs and extend them to all Chinese imports, or more than $500 billion worth of products, raising the specter of a full-blown trade war between Beijing and Washington.
The meeting gives Trump and Xi a chance to pull back from the brink and declare a cease-fire while aides resume negotiations. It’s “an opportunity to turn a new page, break through,” Trump’s top economic adviser, Larry Kudlow, told reporters at the White House.
Both leaders have strong incentives to reduce tensions — for Trump, a likely bounce in wobbly stock markets and help in sustaining U.S. economic growth as he heads into his reelection campaign. But Kudlow put the onus on Xi to “come up with some new ideas.”
Few independent analysts expect Xi and Trump to come away from Buenos Aires with a substantive and lasting deal, however.
In part that’s because senior U.S. and Chinese officials have not met in weeks and the president sees significant and complex problems in the U.S. relationship with Beijing — a huge trade imbalance, unfair subsidies to Chinese businesses, pressure on U.S. companies to transfer sensitive technology to China to do business there, lack of U.S. market access in China, increasing government-sponsored cybertheft of intellectual properties, and so on.
Beyond these tough structural issues, Trump and Xi must contend with a growing mistrust on political and security concerns that predates the two strong-willed leaders, although Trump’s “America first” agenda and Xi’s Made in China 2025 blueprint to dominate key industries have sharpened tensions.
Some analysts foresee an inevitable clash between the world’s only superpower, and a rising challenger — with a state-run economy and oneparty government — threatening to supplant it.
“On the U.S. end, China is a new phenomenon. Never has there been such a massive economic power with such a divergent set of economic rules,” said Claire Reade, senior counsel at Arnold & Porter and former assistant U.S. trade representative for China affairs.
“It’s all a major experiment right now,” she said referring to China’s competing economic and political model, and how the U.S. responds to it. “This meeting between Xi and Trump is a small test of how this experiment is going to proceed.”