Trump’s top economic advisors wordlessly left Beijing after a two-day trade meeting that was both bewildering and worrisome –worrisome because it showed the two sides are miles apart, raising fears of trade war, and bewildering because Trump’s demands were so far-fetched. The mystery? What’s next.
Even by President Trump’s unpredictable and bare-knuckles style of negotiating, his economic team’s visit to Beijing in recent days to confront China on trade was both bewildering and, for many in both countries and beyond, worrisome.
Worrisome because the two-day meeting that concluded Friday showed that the U. S. and China are miles apart, making the threat of a trade war very real. There was no joint communique afterward or any official word on when, or whether, they would meet again.
And bewildering because the indications are that the two sides talked past each other, with Trump’s high-level emissaries presenting an eight-point set of demands that analysts called so far-fetched that no country would accept it, let alone China — a rising superpower whose national pride is wrapped up in a historical narrative of overcoming century-long subjugation by foreign powers.
The U. S. demands, spelled out as a draft framework for negotiations, not only call for China to cut its $337-billion trade surplus with America by more than half, $200 billion, and immediately halt state support for President Xi Jinping’s signature « Made in China 2025 » industrial policy. But also, they say that Beijing must refrain from retaliating or filing legal challenges should the United States slap tariffs or investment restrictions against China.
« That’s a non-starter for any leader, » said Andy Rothman, an investment strategist at San Francisco-based Matthews Asia and former economic officer at the U. S. Embassy in Beijing.
Then why would Trump’s delegation of Cabinet members, including Treasury Secretary Steven T. Mnuchin, Commerce Secretary Wilbur Ross and the U. S. trade representative, Robert Lighthizer, present such an unrealistic set of demands?
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Neither Rothman nor other analysts had an easy answer, except to say that it has become standard operating practice for Trump to keep allies and adversaries alike guessing, with surprising demands and threats of severe actions. Some of them, like Trump’s campaign promise to label China a currency manipulator right away, turned out to be bluster.
« It is hard to assess whether this was a kind of ‘fire and fury’ message intended to signal to the Chinese that they are dealing with a very serious situation, » said Claire Reade, a former assistant U. S. trade representative for China affairs.
« It is also possible that the U. S. side knew it was a complete non-starter, but used the proposal to detail China’s sins, demonstrate China won’t fix them and thereby further justify U. S. actions against China. »
The outlook is muddied by the president’s repeated praise of Xi, especially for ratcheting up economic pressure on North Korea and its leader, Kim Jong Un.
