A Wall Street Journal headline on Friday hailing a “roadmap to resolve trade dispute,” which had allegedly been plotted by officials in the US and China, is looking increasingly like wishful thinking. In contrast, reports this week ahead of trade talks in Washington paint a deeply pessimistic picture.
US President Donald Trump himself did little to lighten the mood when he told Reuters on Monday of the trade talks, “I don’t anticipate anything coming out of it.”
He also called into question reporting that both sides have confirmed plans for Trump to meet with Chinese President Xi Jinping in November. “I’m not sure that it’s been set up yet. We’ll see,” Trump said about the meeting. The WSJ had cited news of the two leaders sitting down together as a reason to be more optimistic about the talks this week.
In the interview, Trump expressed his disappointment about China’s cooperation on North Korea. “They helped very much initially,” he said, adding, “they’re helping much less now. Because of trade.”
After the Reuters interview, The Financial Times reported that “neither side is optimistic that the meeting in Washington, between teams led by Wang Shouwen and David Malpass, can succeed where three earlier rounds failed.”
Vice-minister Shouwen and undersecretary Malpass are stand-ins for Chinese Vice-Premier Liu He and Treasury Secretary Steven Mnuchin, who hailed a trade truce after talks in May, only to be undercut by Trump, who quickly announced tariffs despite the apparent breakthrough. The consensus among observers is that the talks this week are just to test the waters and see if there is room to move forward with more negotiations.
A report from Axios on Tuesday gave a laundry list of reasons to worry that Trump will follow through with tariffs on an additional US$200 billion in Chinese products. The White House senses weakness in Beijing as China’s economy cools, according to the account, and the president sees this as a huge opportunity to shake up the global trading system.
“They’re shaken up,” is how one senior official described leadership in Beijing.
“The president is all-in, 100% on China [trade action],” a senior administration official said.
A deal that was negotiated in May, described by trade hawks in the White House as “appeasement,” is “now off the table, in part because the White House feels China has made no changes in practices the US objects to, including its theft and heavy-handed acquisition of American companies’ intellectual property and technology,” according to the report.
All of this aside, the chatter could be more of Trump’s negotiating style playing out, as was the case with North Korea, a country he threatened with “fire and fury” shortly before giving the royal treatment.