Por Frank Ching
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The G20 summit in Buenos Aires, the first such meeting held in South America, is important in its own right but much of the international interest is in a bilateral to be held on its sidelines: the Donald Trump v. Xi Jinping meeting on the trade war between the United States and China.
The American president, as is his wont, is blowing hot and cold. In an interview published Monday, he said that he expects to move ahead with raising tariffs on $200 billion of Chinese goods to 25% from 10%. But later that day, the president said of the possibility of a China deal: “It could happen.” Such statements are meant to keep his opponent, President Xi, off balance.
Back in March, before he actually imposed tariffs on Chinese goods, the American leader said, “trade wars are good and easy to win.” He doesn’t seem so sure any more. In September, when Trump launched the trade war, he knew he was in a better position to impose tariffs on Chinese imports than China was in doing the same thing to its American imports simply because the US has a huge trade deficit with China.
In the intervening months, after China retaliated as expected, both sides are feeling the pain. While economic officials seek an agreement in Buenos Aires in the run-up to the Trump-Xi meeting, the final outcome still hangs in the balance.
It is in the nature of Trump to make use of summit diplomacy to achieve major breakthroughs where he can claim personal credit and Trump said again in a recent interview, “We’re going to make a great deal with China. And everybody hopefully will be very happy, including China.” But, the president made clear on Monday, “The only deal would be, China has to open up their country to competition from the United States.”
Xi, the Chinese leader, insists that China is in fact opening up. Next month, China will celebrate the 40th anniversary of reform and opening up. But, it is clear, even after 40 years, China is still not really open. To say now that China is going to continue opening up gradually won’t convince this American president.
By now, China has no doubt received the message. The time for promises is over. This is the time for action.
In effect, the US is asking China to abandon the practices that had enabled the country to grow rapidly for four decades, especially since joining the World Trade Organization in 2001, and to become the world’s second largest economy.
For Trump, such policies enabled China to rip off the United States. Americans generally feel that it is high time for China to open itself up to competition.
Only last week, the United States Trade Representative said in an update to its “Section 301” report that China had failed to alter its “unfair, unreasonable and market-distorting practices.” Neither side wants a summit to end without an accord, even if it is simply to hold more talks. But the fact that Trump’s 10% tariffs will rise to 25% Jan. 1 makes it difficult for China to continue talking, with a gun held to its head. But Trump is unlikely to budge.
Frank Ching is a columnist for the South China Morning Post, Hong Kong. Exclusive for Clarín