It takes two to tango but not if you are Donald Trump or Xi Jinping.
They have come up with a unique routine in the carefully choreographed diplomatic dance of quick, quick, slow and slow, slow, quick.
Taking the lead again, the US President warned that he was in no hurry to push through a phase two trade deal between the United States and China. Phase one is due to be signed off in Washington next week with Chinese Vice-Premier Liu He heading to the American capital on Monday.
But that will be the easy part.
“[Phase two will] take a little time,” Trump told a media briefing earlier this week. “I think I might want to wait to finish it until after the [presidential] election because I think we can make a little bit better deal, maybe a lot better deal.”
His soft-shoe shuffle will probably play well in Beijing. President Xi understands that moving the trade talks on to a second, more crucial stage will be fraught with risks.
Phase one proved challenging even though it covered what analysts and economists have described as the “easy issues.”
While details are still sparse, key points Xi’s government has reportedly agreed to address are intellectual property violations, currency manipulation and increased US access to financial services, a sector that was already opening up.
A rise in agricultural and seafood imports from the States, worth around US$50 billion, is also believed to be part of the deal.
In exchange, the US decided to freeze planned tariffs worth $160 billion on Chinese imports, which were due to kick-in on December 15. Duties imposed in September on goods valued at up to $120 billion will be halved to 7.5%. The reductions will take effect 30 days after the agreement is finalized.
But tariffs imposed earlier on Chinese imports to the US worth $250 billion will remain at 25%. In short, this is a truce in the nearly two-year-long trade war between the world’s two largest economies.
“Today, concerns center on prospects for negotiation of a phase two deal and further talks to come,” Zhao Minghao, of the Charhar Institute, a Chinese think tank, said.
“In fact, the decisive factor is not negotiating skill or bargaining in specific areas but how China and the United States recognize and respond to the significant differences between their economic and political systems and ideologies,” he wrote on China-US Focus, an academic website.
Indeed, that goes to the heart of the dispute. Phase two will touch on China’s controversial state-run model. Solving that paradox will be difficult to achieve. Cybertheft and the on-going high-tech row between Beijing and Washington are other problems entangled in red lines that can not be crossed.
“These differences are more complicated than past disputes over capitalism and socialism between the US and the Soviet Union,” Zhao pointed out, referring to the old Cold War between the two military superpowers.
The new Cold War could be just as chilling.