Global trade is at stake as Trump and Xi come face to face

The question is whether the US can defuse a trade war with China that is threatening the global economy

By AP in Washington
  • Published 27.11.18, 12:31 PM
  • Updated 27.11.18, 12:31 PM
  • 2 mins read
  •  
Donald Trump is to meet Xi Jinping at the Group of 20 summit in Buenos Aires, Argentina, on Friday. AP

To hear President Donald Trump tell it, he was made for a moment like this: A high-stakes face-off. A ticking clock. A cagey adversary.

The man who calls himself a supreme dealmaker will have the opportunity this week to put himself to the test. The question is whether he can defuse a trade war with China that is shaking financial markets and threatening the global economy — and, perhaps, achieve something approximating a breakthrough.

Trump is to meet with his Chinese counterpart, Xi Jinping, during the Group of 20 summit in Buenos Aires, Argentina, on Friday and Saturday. Unless the two leaders can achieve a truce of sorts, their conflicts will likely escalate: On January 1, the tariffs Trump has imposed on many Chinese goods are set to rise from 10 per cent to 25 per cent, and Beijing would likely retaliate.

Most analysts say they doubt Trump and Xi will reach any overarching deal that would settle the dispute for good. The optimistic view is that the two sides may agree to a cease-fire that would buy time for more substantive talks and postpone the scheduled escalation in US import taxes.

Yet, no one really knows. Each side seems prepared to wait out the other in a conflict that could persist indefinitely.

I know every stat. I know it better than anybody knows it. And my gut has always been right.

Donald Trump

In advance of the meeting, Trump has sounded his usual note of boastful confidence. Speaking to reporters on Thanksgiving Day, he said:

"I'm very prepared. You know, it's not like, 'Oh, gee, I'm going to sit down and study.' I know every stat. I know it better than anybody knows it. And my gut has always been right."

Most trade analysts are skeptical that any significant agreement is likely this week.

"Expectations should be very low," said Wendy Cutler, vice-president of the Asia Society Institute and a former US trade official who negotiated with China. "We need to be very clear-eyed. It's going to be a very difficult negotiation. The issues at hand don't lend themselves to quick solutions."

The trade war erupted last fall after Trump imposed import taxes on $250 billion of Chinese goods, and Beijing retaliated with tariffs on US exports. The justification for the US move, according to Trump, is that Beijing has long deployed predatory tactics in its drive to supplant America's technological dominance. The administration alleges — and many trade experts agree — that Beijing hacks into US companies' networks to steal trade secrets and forces American and other foreign companies to hand over sensitive technology as the price of access to China's market.

Beijing disputes those allegations and asserts that Trump's sanctions are merely an effort to hinder an ambitious rival.