Arranging the right mood music for the G20 trade talks in Buenos Aires later this week will be crucial. Soul would be preferred to heavy metal.
Yet just days before the United States President Donald Trump meets China’s head of state Xi Jinping in Argentina’s capital, the rhetoric resembles a booming bass line from Black Sabbath.
“If we don’t make a deal, then I’m going to put the US$267 billion additional on,” Trump warned, referring to tariffs on the rest of China’s imports.
The White House has already rolled out duties on goods and products from the world’s second-largest economy worth roughly $250 billion.
Back in September, Washington slapped 10% tariffs on $200 billion worth of imports in an effort to force Beijing to curtail unfair trading practices, including intellectual property violations and Xi’s state-backed economic model.
Next year, those taxes could rise to 25%.
In response, Xi’s administration has been defiant, denying allegations of technology theft and industrial espionage, which have surfaced in the past few weeks. Beijing has even played down Trump’s remarks, which were made earlier this week.
“Their meeting is just around the corner,” Geng Shuang, a spokesman for China’s foreign ministry, told a media conference in Beijing on Tuesday.
“We hope the US [will] work with us to implement and follow the spirit of the phone call [on November 1 between the] two state leaders and ensure [a] positive outcome,” he added. “Meanwhile, we will be resolute in ensuring our legal rights and interests.”
Still, Trump’s latest tirade simply reiterates earlier statements and could be all part of his “Art of the Deal” philosophy. It also comes less than two weeks since Vice-President Mike Pence’s uncompromising speech at the Asia Pacific Economic Co-operation meeting.
“Pence remarked that ‘it’s up to China to avoid a Cold War,’” Yan Se, an associate professor with Peking University’s Guanghua School of Management, and Pearson Goodman, a graduate student studying economics at the Yenching Academy of Peking University, wrote in an opinion piece for the Caixin media group in Beijing.
“The implication here is that a trade deal depends on whether or not China will be willing to make sincere and significant reforms. Yet China has already answered – these reforms are in fact underway,” they added.
“The window is now open for a deal that would give renewed energy to China’s liberalization and reform while getting Trump the large, deficit-shrinking numbers he craves. China has made its decision; it’s now up to the US to make its own,” they concluded.
Of course, it will take two to tango in Buenos Aires.
Finding common ground on what “opening up” actually means, as well as hammering out a rigid timeframe of when these “reforms” will take place, will be the devil in the detail for US and China negotiators.
During an interview with the Wall Street Journal, Trump made it clear that “the only deal would be” if China opens “up to competition from the United States.”
But will that be enough to defrost this new economic Cold War?
David Dollar, a senior fellow at the John L Thornton China Centre for the Brookings Institution, is far from convinced.
“Even if the two presidents reach an agreement that avoids escalation of the trade war, the issues of market access and technology competition are likely to be with us for the foreseeable future,” he said on the Washington-based think tank’s website.
Stephen Innes, the head of Asia-Pacific trade at forex firm OANDA in New York, put it more bluntly. “It doesn’t sound like we will see Donald the Deal Maker but instead Trump the Trade Warrior at the G20,” he said.
Probably, with Black Sabbath’s Heaven and Hell playing in the background.