US may take trade off the table for next Trump-Xi meeting

  • Leaders are slated to meet at G20 summit in Argentina but White House sources say they may not address ongoing trade war
  • US waiting for signal from Beijing that it is serious about addressing its list of demands
PUBLISHED : Saturday, 27 October, 2018, 1:49pm
UPDATED : Saturday, 27 October, 2018, 9:44pm

The White House is considering excluding trade from the agenda of a meeting between US President Donald Trump and China’s Xi Jinping next month but is not likely to cancel it altogether, according to two people familiar with the matter.

Some of Trump’s trade advisers do not want to engage with China on trade until Beijing shows it is serious about addressing the US’s list of negotiating demands, according to one of the people, who declined to be identified because the discussions are not public.

Even if trade is left off the official agenda, the discussion may be hard to avoid when the leaders of the world’s two largest economies, who are locked in a tariff war, meet. Trump also has a history of cutting vague deals on the fly with fellow world leaders.

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White House economic adviser Larry Kudlow said on Tuesday that the two presidents would meet “for a bit” at the Group of 20 leaders summit in Buenos Aires. The hope was “the two presidents agree on some basic principles”, said Kudlow, who declined to predict that outcome.

On Thursday White House Press Secretary Sarah Huckabee Sanders said a meeting between Trump and Xi at the summit, which will be held on November 30 and December 1, was still in the planning stages. “We’ll keep you guys posted as we finalise those plans,” she said.

However, another official rejected the notion that excluding trade from the agenda was being seriously considered, saying they were not aware of any discussion of the idea at the top level.

Some in the administration are also preparing for the possibility that Trump and Xi could agree on a ceasefire of sorts during their G20 meeting – possibly by delaying an increase in tariffs now planned for January.

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Two other people familiar with the matter said the Trump administration was asking China for a number of commitments, including on joint efforts to make progress on securing a disarmament deal with North Korea as a pre-condition for the Trump-Xi meeting.

The administration has been growing increasingly frustrated with what it sees as stonewalling by Beijing.

“China has not responded positively to any of our asks,” Kudlow, the head of Trump’s National Economic Council, said in a speech in Detroit last week.

One of the people said the administration in May presented Beijing with a list of 52 separate actions that it wanted to see. Chinese officials had since split that into a list of 142 separate potential measures they could take, but have yet to present them to US officials.

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At the very least, the administration wanted Chinese officials to brief the administration on what they were prepared to do before it agreed to discussions between Xi and Trump at the G20.

Wang Yong, an associate professor at the School of International Studies at Peking University in Beijing, said he believed the Trump administration was using the potential summit as a bargaining chip to win concessions from Beijing.

“The US side knows China values the importance of summits,” he said.

“Both sides are testing the waters at the moment, but maybe the demands by the Trump administration have exceeded what the Chinese side is able to offer.”

Wang said that while it was possible that China could offer some concessions, such as opening up its markets and providing better protection for intellectual property rights, it would not comply with Washington’s requests for it to give up support for its “Made in China 2025” plan, for instance.

Chinese officials, meanwhile, continue to complain that they are not sure who they should be working with in the Trump administration.

After reaching deals with cabinet-level officials such as Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross only to see them rejected by Trump, officials in Beijing said they were wary of doing the same again.

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Officials in Beijing are also now seeking US assurances that any concessions they make will be linked to the lifting of tariffs by the Trump administration, said Craig Allen, president of the US-China Business Council, who led a delegation that met senior Chinese officials earlier this month.

Allen said senior Chinese officials recognised the need to address US concerns over intellectual property theft and other issues.

United States frustrated by China’s ‘lack of action’ on trade imbalance

Xi also had a number of public speeches before the G20 scheduled at which he could send a public message to Trump, starting with a the five-day “import fair” that starts in Shanghai on November 5 to which the government has invited delegations from around the world including the US.

“There is a window of opportunity right now leading up to the meeting between the two presidents,” Allen said. He cautioned, however, that ending an impasse in talks “will require one of the governments to move first”.

Inside the Trump administration, China hawks such as US Trade Representative Robert Lighthizer still want Washington to apply more pressure on Beijing. Trump himself has said that he does not believe that the time is right yet for a deal with China.

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The US this year has already imposed tariffs on US$250 billion in trade with China. Ten per cent tariffs on US$200 billion in trade that took effect in September are due to increase to 25 per cent on January 1. Trump has also threatened to impose tariffs on the remaining goods imports from China, which last year were worth US$506 billion.

“Billions of dollars are, and will be, coming into United States coffers because of Tariffs,” Trump tweeted on Tuesday.

“If a country won’t give us a fair Trade Deal, we will institute Tariffs on them. Used or not, jobs and businesses will be created. US respected again!”