It will take two to tango in Buenos Aires next week. When trade talks take place between United States President Donald Trump and China’s head of state Xi Jinping, nimble footwork will be required in Argentina’s capital, the spiritual home of the “dance of pulsating passion.”
The omens, though, of sealing a seductive pact are looking decidedly remote.
To hammer out an agreement at the G20 summit, the self-proclaimed master of the “deal” and Beijing’s pragmatic politician will have to come up with all the right moves.
“The issue with China is not just tariffs,” US Commerce Secretary Wilbur Ross said. “If it was just tariffs, I think we could work it out very, very, very quickly.”
“The real issue is intellectual property rights, forced technology transfers, industrial espionage, that kind of thing. We can’t tolerate abuses of that sort,” he added.
Naturally, China has denied such claims but this has only added to a Cold War-style atmosphere in the past 10 months along with tit-for-tat tariffs.
During the summer, the White House rolled out more duties on Chinese imports worth nearly US$250 billion, increasing the pressure on the world’s second-largest economy.
The response from Beijing has been shrill at times. On other occasions serene.
“We hope that, on the basis of equal consultations, mutual benefits and trust, we could make common efforts to manage differences and find ways to resolve problems,” Wang Shouwen, the vice-commerce minister, said at a news conference on Friday.
His remarks came after Trump told a media conference at his Mar-a-Lago residence in Florida during the Thanksgiving holiday that he was well prepared for the meeting with Xi.
“I have been preparing for it all my life,” he said. “I know every ingredient, every stat. I know it better than everybody knows it. My gut is always right.
“China wants to make a deal. If we can make a deal, we will,” he continued, adding that he had a “great relationship” with President Xi.
“I like him a lot [and] I think he likes me. [But he] probably likes me less now than he did before.”
Still, statecraft will be at a premium when the curtain goes up in Buenos Aires, especially after the latest revelations.
Earlier this week, accusations of technology theft through intellectual property infringements surfaced again when the office of US Trade Representative Robert Lighthizer released an updated report.
The 53-page study simply illustrated the chasm which exists between Washington and Beijing.
“China fundamentally has not altered its acts, policies, and practices related to technology transfer, intellectual property and innovation, and indeed appears to have taken further unreasonable actions in recent months,” the report stated.
The document highlighted China Telecom and how the state-owned conglomerate engaged in a campaign to “hijack internet traffic and direct it through mainland servers for possible collection and analysis.”
This allegation was reported by Asia Times last month.
To combat what is perceived to be a ‘national threat,’ the Trump administration is pushing ahead with plans to tighten restrictions on technology exports.
It will also reach out to overseas “allies” to persuade them to avoid telecom equipment manufactured by major tech player Huawei because of “cybersecurity risks,” the Wall Street Journal revealed.
How that will play out is open to debate. But tensions have been steadily rising in the past two weeks with the trade spat spilling over at the Asia Pacific Economic Co-operation meeting last week after an uncompromising speech by US Vice-President Mike Pence.
“We suggest a certain country matches its words with deeds, rather than wag the finger at others,” Hua Chunying, the Chinese foreign ministry spokesperson, said in a statement following Pence’s APEC tirade.
“The [US] should treat all countries on an equal footing, respect other countries’ rights of following a development path that accords with their own national conditions.”
Yet for Beijing, this ongoing war of words could not have come at a worse time as the impact of the conflict starts to filter down into China’s real economy. Last week, a batch of data released by the National Bureau of Statistics painted a surreal picture.
While industrial output and investment grew faster than expected in October on the back of a raft of government measures, retail sales have softened and mainland markets have wobbled.
The property sector has also suffered while new car sales have stalled as consumers rein in spending.
“Trade tensions are going to deepen,” Michael Taylor, the chief ratings officer for Moody’s Asia Pacific region, told the South China Morning Post. “Those 25% tariffs will be implemented.
“We will see some impact of the tariffs next year in terms of China’s growth,” he added. “I don’t think [a deal] can be just a matter of trade, coming to some kind of agreement around a further opening up of China’s markets, or an undertaking to purchase more US exports.”
For Trump and Xi, this could be their first and last tango in Buenos Aires before they dance to a more belligerent beat.