Trump and Xi plan to face each other in the midst of commercial tension
Trump and Xi plan to face each other in the midst of commercial tension
The White House is moving forward with plans for President Trump to meet with Chinese leader Xi Jinping at a multilateral summit in late November, according to officials from both nations, to devise a way out of the country. commercial battle shaking markets and poisoning relations between the two largest economies in the world.
The Trump government informed Beijing of its decision to move forward with the summit meeting in recent days, while China hopes that the meeting will provide an opportunity for both sides to alleviate the growing trade tensions. The meeting is scheduled to take place at the summit of the Group of 20 leaders in Buenos Aires at the end of November.
On the US side, the meeting is being driven by Treasury Secretary Steven Mnuchin and the Director of the National Economic Council, Larry Kudlow. The two men, who have worried about the reaction of the market to the commercial fight, have been trying to start negotiations for months, with little success. During this time, the USA UU They have imposed tariffs on $ 250 billion of Chinese imports, about half of what China sends to the US. UU
Mr. Trump has dedicated a team to plan his summit meeting with Mr. Xi, the officials said. One of the people involved in the planning is Christopher Nixon Cox, grandson of former President Richard Nixon, whose trip to China in 1972 finally led to diplomatic relations between the two nations. Meanwhile, the planning team on the Chinese side includes Liu He, Mr. Xi's economic envoy.
Chinese and US negotiators in August tried to set up talks to pave the way for the leaders' summit, but the recent stalemate cast doubt on the possibility that the meeting will continue as originally planned. The Chinese leadership business conversations scotched with Washington at the end of last month after the White House Announced new rates at $ 200 billion. in Chinese products and Beijing retaliated with liens on $ 60 billion in US products.
The most hard-line faction in the White House, represented by the United States Trade Representative Robert Lighthizer and business adviser Peter Navarro, has been trying to use tariffs as a lever to get China to make fundamental changes in industrial policies Chinese
The planned meeting between Mr. Trump and Mr. Xi is being driven by the Director of the National Economic Council, Larry Kudlow, above, and the Secretary of the Treasury, Steven Mnuchin.
Photo:
Evan Vucci / Associated Press
They worry that the United States will declare the end of the trade battle too soon, removing the pressure on Beijing. "The plan is to put Trump in a room with Xi, get a small victory and declare the end of everything," said a US source familiar with the negotiations, who views the talks skeptically.
Business executives from the United States, on the other hand, expect a summit to provide some relief to tariffs, which, they say, hurt their business. In particular, they want Mr. Trump to suspend plans to increase the level of tariffs in the $ 200 billion in goods to 25%, from 10%, on January 1, as currently planned.
"In the meetings that our board of directors held in Beijing this week, we encouraged senior Chinese officials to share a detailed action plan with their counterparts in the United States to lay the groundwork for a successful meeting at the G20." said Jacob Parker. vice president of operations in China at the Business Council of the United States and China, a group representing some 200 US companies doing business with China.
Defense Secretary Jim Mattis canceled a trip to China, and President Trump accused China of electoral interference. Gerald F. Seib of the WSJ explains how tensions between the United States and China are increasing. Stock Photo: Getty
The planning of the summit represents an effort on both sides to prevent a deep trade dispute from hampering the relationship between the United States and China and further aggravate global markets. On Wednesday, the US stock market suffered its biggest sale since February, partly because investors became more concerned about the US-China trade dispute. Chinese stocks and the yuan also fell on Thursday.
The bilateral relationship is also deteriorating in other ways. In addition to the stalled trade negotiations, military talks between the two nations have stopped and both sides have they blamed for a recent close encounter between their warships in the South China Sea.
Earlier this week, Secretary of State Mike Pompeo they exchanged irritating words with Chinese Foreign Minister Wang Yi in Beijing, who risked complicating an early summit meeting between Mr. Trump and North Korean leader Kim Jong Un. That exchange came after an important speech last week in which Vice President Mike Pence described a change in US strategy, from compromise to confrontation with China, accusing Beijing of undermining US interests on several fronts. , including interference in the US elections. Beijing has vehemently denied these accusations.
The latest exchange of tariffs, which went into effect on September 24, is bringing China and the United States closer to a full-fledged trade war. Mr. Trump has pledged to further increase the pressure on China by imposing tariffs on another $ 257 billion of Chinese products, making all Chinese imports subject to such penalty taxes.
While Chinese officials have repeatedly said they would not accept pressure tactics, Beijing is leaving open the possibility of entering into further negotiations with Washington. "President Xi believes there are many reasons to have a stable relationship with the US," said a Chinese official.
The deep-water port of Yangshan in Shanghai in July.
Photo:
Qilai Shen / Bloomberg News
Previous trade negotiations between the two sides ended without any progress. Trump officials perceived Beijing's offers, which largely involve more Chinese purchases of agricultural products and other US products, as inadequate to address the White House's demand for a fairer playing field for American companies in the United States. China.
With the threat of more tariffs, Chinese officials in recent weeks have questioned whether now is the time to negotiate. Many in China's political circles believe that Beijing should wait to negotiate until after the mid-November elections in the United States. They say that Mr. Trump is not ready to close a deal and is attacking China now to appeal to his political base, and may be more susceptible after the elections.
So far, Beijing's strategy has been to respond vigorously to the commercial offensive of the Trump administration. But because China imports less from the United States than vice versa, just under $ 130 billion last year, Beijing is running out of products to penalize. If Beijing takes measures to retaliate by targeting US companies operating in China, as some officials have proposed, the country's leadership runs the risk of damaging the foreign investment environment and causing foreign capital to flee at a time when the economy China is slowing down.
That is why Mr. Xi also ordered his officials to continue to engage in business in Washington and the United States, according to Chinese officials and government advisers. For example, senior Chinese officials in recent weeks have struggled to reassure American companies that there will be no reprisals against them.
Write to Lingling Wei in lingling.wei@wsj.com and Bob Davis in bob.davis@wsj.com
Corrections and Amplifications
An earlier version of this article incorrectly spelled the name of Steven Mnuchin.
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