Can Xi charm Trump out of escalating the US-China trade war?

Posted at 7:40 PM, Jun 27, 2019
and last updated 2019-06-28 00:08:04-04

Chinese President Xi Jinping has shown himself adept at maneuvering within China’s political system, reaching a level of power and control over the ruling Communist Party not seen since the days of Mao Zedong.

He’s also seen major successes overseas, building alliances and expanding China’s influence abroad. One thing that’s not always been clear is how adept he is at personal diplomacy — negotiating one-on-one with other world leaders.

He will need to lay on the charm in spades this week when he meets United States President Donald Trump at the G20, amid threats of further escalation in the US-China trade war. While many eyes are on Trump going into G20, arguably it is Xi facing the bigger test.

There are signs — not least that Xi is willing to take the meeting at all — that Beijing may be prepared to make some concessions in order to see the back of heavy tariffs imposed by Washington, but only if Trump is similarly willing to compromise.

Trump has made clear the potential costs of a failure to make progress, but he’s not the only one with something in his back pocket. Xi’s recent visit to North Korea, once Trump’s signature foreign policy success that is now causing headaches in Washington.

‘Very good chemistry’

Trump has a track record of being bowled over by world leaders when he meets them, something Xi has proven himself the master at.

Xi has proven his ability to ‘wow’ Trump, who still brags about being the first foreign leader to dine in Beijing’s Forbidden City since the founding of modern China. Even when at odds about trade, Trump praises Xi on a personal level.

Trump said in a speech during his visit to Beijing that Xi’s people were “very proud” of him and hailed the “very good chemistry between the two of us.” Later Trump revealed that he had called Xi the “king” of China and said “I get along with him great.”

Indeed, during Trump’s first year in office, relations between Washington and Beijing were on the up, with China help put pressure on North Korea over denuclearization and the US not delivering on threatened trade tariffs Trump talked up during the campaign.

All of this fell apart in 2018, however, when Washington — after months of grumbling about the trade deficit and investigations of Chinese practices — slapped Beijing with billions of dollars in tariffs. China quickly responded in kind and soon an all out trade war was in process.

So far, repeated attempts to make a deal have failed, with the most recent talks falling apart after Beijing apparently overplayed its hand, expecting Washington to blink and getting a fierce response instead.

“We are now a much bigger economy than China, and have substantially increased in size since the great 2016 Election. We are the ‘piggy bank’ that everyone wants to raid and take advantage of. NO MORE!” Trump said in May after the failed talks, adding that China was hoping for a change in government in 2020 would lead to a better deal for Beijing.

‘Terrific person’

Xi may look at the G20 lineup and feel he has more allies at the meeting than Trump. He’s pulled both India and Russia tight, and even erstwhile enemy Japan is growing closer to Beijing, while in Europe both Turkey and Italy have signed up to Xi’s trademark Belt and Road project, as has Indonesia.

At the same time, Trump has alienated traditional European allies, and strained some relations in Asia with aggressive trade tactics. Another Trump ally, Saudi Arabia’s Crown Prince Mohammed bin Salman, is facing scrutiny and suspicion in Washington over his involvement in the murder of journalist Jamal Khashoggi.

Trump and Xi’s meeting at the G20 will be the first time the two men have been face-to-face since the trade war escalations, and a great deal of pressure will be on them to find a breakthrough where negotiators from both sides have previously failed.

“I have a very good relationship with President Xi,” Trump said earlier this month. “We’ll see what happens. I think we have a chance. China wants a deal. They don’t like the tariffs.”

Calling Xi a “terrific person,” Trump said the two men had spoken by phone and were working towards a “good deal and a fair deal.” Meanwhile, China’s Foreign Ministry said both countries had a role to play in “injecting confidence and vitality into the global markets.”

Messaging from both sides heading into the G20 summit has been confused.

Washington postponed a speech by Vice President Mike Pence scheduled for this week expected to be highly critical of Beijing, with the White House saying it was “due to progress in conversations between President Trump and President Xi.” At the same time, however, on Friday five new Chinese firms were placed on the US entities list, restricting their ability to do business with American companies.

The Chinese side has also been blowing hot and cold. Speaking at a press briefing on Monday, Vice-Minister of Commerce Wang Shouwen, one of Beijing’s top trade negotiators, said the US and China “should meet each other halfway, which means that both sides will need to compromise and make concessions.”

In a commentary on Monday in the People’s Daily, the official mouthpiece of the Communist Party, the paper said the idea that China should make further concessions was “ridiculous and naive.”

“Lying behind the trade feud is America’s intention to stifle China’s development,” the commentary said. “The US wants to be a permanent leader in the world, and there is no way for China to avoid the ‘storm’ through compromise.”

Threats and promises

That Xi is willing to meet Trump at all suggests he likely has something to offer — in an effort to ratchet down the ongoing trade dispute

Equally possible is that Xi may not necessarily coming to the table totally of his own volition. Trump has threatened to slap tariffs on another $300 billion worth of Chinese goods if Xi didn’t meet with him, leading to a mild rebuke from Beijing, which said “China doesn’t want a trade war but we are not afraid of fighting it.”

Trump’s bullying was effective in ensuring a meeting, but Xi has been showing in recent weeks that he is by no means a pushover. As well as responding tit-for-tat on trade war escalations, Xi has shored up an alliance with Russian President Vladimir Putin and visited Pyongyang for a successful meeting with North Korean leader Kim Jong Un.

The US President is due to fly to South Korea following the G20, during which he is expected to pay a visit to the demilitarized zone (DMZ), the de facto border with North Korea. Relations between Pyongyang and Washington, on the outs after the failure of Trump and Kim’s last meeting in Hanoi, appear to be warming up again, and Beijing will be keen to emphasize that it can be a help in this, or serve as a major hindrance.