Tuesday afternoon brought a barrage of G20 headlines, all of which are ostensibly notable. “Ostensibly” because when taken as a whole, they don’t really tell us anything we didn’t already know.
On the US side, Trump is hoping that his sit-down with Xi will result in the reopening of trade talks. That’s not a very lofty ambition, but it would certainly be a welcome development if the two sides begin to formally negotiate again.
A senior administration official described the chances that the two leaders agree to renew talks as “pretty good”.
That said, the US will not accept any tariff conditions from China, which appears to mean Trump isn’t coming to the table prepared to offer any concessions. Apparently, the US is willing to at least discuss Huawei, which you’d imagine would have come up whether Trump wanted to talk about it or not.
Pessimism about the chances that the Trump-Xi pow wow – which will take place on Saturday – will produce anything of substance emanates in part from the idea that the blacklisting of Huawei was a bridge too far for Beijing. It is now clear that Trump is after more than simply reducing bilateral trade deficits and leveling the proverbial playing field.
The addition of four Chinese firms tied to the country’s super-computing industry to the Commerce department’s entity list is further evidence to suggest that the US is out to clip China’s wings and curtail its tech and economic ambitions.
Read more: Trump Slaps Xi In The Face One More Time, Goes After China’s Super-Computing Capabilities
China’s FedEx investigation and the creation of their own corporate blacklist are signs that Beijing is digging in for a long fight and the Party’s vast state media apparatus has spent the past 45 days preparing the public for a protracted dispute. The threat of a rare earths export ban only adds to the tension.
The real question headed into the G20 was whether both sides would agree to a ceasefire. According to the official who spoke to Reuters, a deal similar to that which was agreed in Buenos Aires in December is at least possible.
An agreement to keep talking and avoid further escalations would presumably find the US postponing planned tariffs on the remainder of Chinese imports, averting the “all-in” scenario that everyone from farmers to economists to corporate America have begged Trump not to risk.
(Possible outcomes, via Barclays)
Any agreement to delay further escalations would be a “goodwill” gesture, the official told Reuters. Amusingly, the official also said talks with China could drag on for “months” or even “years”.
If you’re wondering whether the US side is expecting a real, concrete deal to be struck this weekend, the answer is obviously “no”.
As ever, the worry is that between Trump’s unexpected move to hike tariffs on $200 billion in Chinese goods early last month and his subsequent threat to slap Mexico with across-the-board duties despite having already struck a trade deal with the country, Beijing will see no utility in engaging with someone who has proven time and again to negotiate in bad faith.
Read more:
What To Expect (Or Not To Expect) From The Trump-Xi G20 Meeting, According To Goldman
