China

Next Month's Trump-Xi Meeting Could End the Trade War, or Escalate It

Trump seems to prefer escalation. More tariffs could be coming in early December.

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Kyodo/Newscom

If a November meeting between U.S. President Donald Trump and Chinese President Xi Jinping does not produce an agreement, the U.S. could further escalate the two nations' trade war with additional tariffs before the end of the year.

Don't get too optimistic about a thaw. Both sides have said they might exclude trade talks entirely when the leaders of the two countries meet in Argentina next month.

Despite that, Bloomberg reports that the Trump administration is ratcheting up the pressure for China to cave on trade—though it remains largely unclear exactly what demands the administration is making. If no deal is reached during the upcoming Group of 20 summit in Buenos Aires, the United States could announce plans to impose tariffs on all Chinese goods in early December, with the tariffs taking effect shortly after the new year.

Already, about $250 billion of Chinese goods imported to the U.S. are subject to tariffs. Most of those imports are currently being charged a 10 percent tariff, which is set to increase to 25 percent at the end of the year. An estimated $257 billion of Chinese imports remain tariff-free for now. If the Trump administration expands the tariffs to include the rest of those imports, the higher taxes would hit consumer goods such as clothing, shoes, and Apple products (which were originally supposed to be included in the most recent round of tariffs before being exempted at the last moment).

Citing a report from Citigroup economists, Bloomberg says that possible escalation of the trade war could hit consumers 10 times harder than earlier tariffs aimed mostly at industrial inputs and goods.

The potential for more tariffs could further rattle a stock market that is already wobbling.

It's fair to wonder whether Trump even wants to make a deal. There have been no trade talks between the countries since August, when the U.S. imposed the latest round of tariffs. Since then, the two sides seem to have drifted farther apart.

Last week The Wall Street Journal reported that the U.S. is demanding that China produce a "concrete proposal to address Washington's complaints about forced technology transfers and other economic issues." But Chinese officials are unwilling to engage in a one-sided negotiation, and they worry that Trump could undermine any potential deal with as little as a single tweet, according to the Journal.

The Washington Post notes that Trump on at least three occasions has blown up negotiations between his own trade officials and senior Chinese officials. So China probably has good reason to feel wary.

Unless the Trump administration suddenly reverses course before next month's meeting, Xi has two choices. He can refuse to go along with Trump's demands—allowing him to save face domestically by standing up to America—or he can offer a new deal, giving Trump more fodder for tweets that humiliate China's attempt to work with the U.S. to end the trade war. Given that choice, not negotiating seems like the only reasonable thing to do. Indeed, that's exactly what Trump would do if the shoe were on the other foot.

Unfortunately, unilateral demands that sabotage the likelihood of an agreement will translate into further escalations of the trade war, and that will translate into higher prices for everything Americans import from China. And for bow it's not even clear whether the Trump administration is looking for a different outcome.

"They do not seem to want to talk," Chinese Foreign Minister Wang Yi told a group of American businessmen at a private meeting in New York last month, according to the Post. "We don't know if they're uncoordinated, or if they're negotiating in bad faith."

It could well be both.

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  1. The same magazine that lectures us on the evils or Russia and the need to always be combative with them also worries about the evil Turmp “humiliating” poor China.

    And the same people who claim selling arms to Saudi Arabia is like the worst thing ever because the killed a sacred journalist, are totally okay with the US propping up the Chinese economy and giving the Chinese government to wealth to build a monsterous police state and an army that can terrorize and threaten its neighbors because TRADE WAR!!

    1. +1000

    2. Re: John,

      The same magazine that lectures us on the evils or Russia and the need to always be combative with them also worries about the evil Turmp “humiliating” poor China.

      Trump is not “humiliating poor China”. He’s raising taxes on us and pretend those taxes affect China, which is the same as pissing on our legs and calling it rain.

      And the same people who claim selling arms to Saudi Arabia is like the worst thing ever because the killed a sacred journalist,

      And killed 3000 plus Americans… on 9/11.

      are totally okay with the US propping up the Chinese economy[…]

      See, that’s what happens when Trumpistas play economist. America is not propping up the Chinese economy. The Chinese economy is propping up OUR economy by allowing us to export OUR inflation to THEM. We get amazing widgets in exchange for pieces of paper with pictures of presidents on them.

    3. If in the next 18 mos we can get a deal with China that protects US IP the tariffs will have been worth it. And I would help Keep America Great in 2020.

    4. If in the next 18 mos we can get a deal with China that protects US IP the tariffs will have been worth it. And I would help Keep America Great in 2020.

  2. And the Donald saith unto them, Why are ye fearful, O ye of little faith? Then he arose, and rebuked the Mexicans and the Chinese and the North Koreans; and there was a great calm, the most fantastic calm the world has ever known.

    But the men marveled, saying, What manner of man is this, that even the Mexicans and the Chinese and the North Koreans obey him!

    And lo, Tiny Baby Jesus in Heaven wept bitter tears for He knew then that His Father had created a more perfect human being than even He Himself.

  3. If this fails, Trump will get the blame.

    If it works but can be spun as a failure, Trump will be blamed.

    If it works and cannot be spun as a failure, Trump will get no credit. Some other variable will be the explanation. In fact Trump will likely be blamed for it not being as successful as it could have been. Thus Trump will have failed.

    That’s the game these days: It it’s bad, blame Trump. If it’s good, give Trump no credit.

    1. Didn’t the press credit Kim Il Sun’s wife with better relations with North Korea?

      1. Do you mean that whole fanboi thing they did on her during the Olympics?

  4. Prediction: Trump wins on style, Xi on inscrutability.

    1. Orange Man vs. Pooh Man!

      1. Too much candy corn cause orange poo(h), man.

    2. Trump will be fully dressed. Xi will only have a middrift shirt on.

  5. Wait… If Americans sell and buy from Chinese citizens and not the Communist Party, why is Trump having to meet Chariman Xi?

    Someday Sarcasmic or the Others will enlighten us as to how a nation gets a Communist nation to lower its trade restrictions when the Communists do not want to have free trade.

    1. Re: lovecons…. Uh, you fool no one,

      Wait… If Americans sell and buy from Chinese citizens and not the Communist Party, why is Trump having to meet Chariman Xi?

      Because he loves mingling with strongmen and authoritarians.

      Also, it wasn’t the Chinese government that raised the tariffs ?that was Trump. So why aren’t you asking him why is he meeting with Chairman Xi instead of simply lifting tariffs and making America a true free trade place?

      1. So why aren’t you asking him why is he meeting with Chairman Xi instead of simply lifting tariffs and making America a true free trade place?

        By lifting the tariffs I presume you mean pull back the specific tariffs that Trump raised, and return them to their prior levels?

        If you mean “remove all tariffs” sure, that’s the nice-to-have option, but that would be highly complex because to be truly fair, it would require that China start cutting its tariffs back– and China has many that long predate Trump.

    2. Once more:
      Tariffs Are A Tax On The Nation’s Own Citizens

      If the Chinese government imposes tariffs on American goods, they are taxing their own citizens and harming their own economy by doing so.

      If you really believe China is an existential threat to the US, then when they are harming themselves, why would you want them to stop? You should be demanding MORE tariffs from China on American goods.

    3. Tariffs are but one trade restriction and really a small part of the trade equation compared to blocked markets, high taxation, IP theft, restrictions on web traffic, Chinese government snooping on web traffic, etc.

  6. Next Month’s Trump-Xi Meeting Could End the Trade War, or Escalate It

    Trump should Make America Grating Again by escalating the trade war because Chinese trade is rapey.

    The Washington Post notes that Trump on at least three occasions has blown up negotiations between his own trade officials and senior Chinese officials. So China probably has good reason to feel wary.

    Can we blame them for thinking that maybe Trump is not serious about free trade? Because no one else ?save for a few ignorant Trumpistas who still believe that Trump is a “free trade guy”? believes Trump is going to remove the tariffs, especially after selling them as our way to prosperity and Making America Grating Again.

  7. The Chinese seem to be inclined toward long-term thinking. I doubt they are going to get flustered by Americans’ four-year flirtation with childish and uninformed policy mistakes.

    1. It’s one thing to let the mask slip, comrade; it’s another to rip it off entirely while buck naked, painted purple, and dancing on a harpsichord.

    2. Yup building man made islands in the south china sea as military bases to choke to provide a coprosperity sphere is forwarding looking alright.

      Imperial japan did in WWII and they lost to America military and industrial might after attacking the USA on Dec 7, 1941.

      1. The Japanese knew they could not win a sustained war. The goal was a quick victory followed by a truce which would keep us out of the pacific and embargo.

        Yamamato made a mistake not launching a third wave to destroy the fuel depot

        The plan was a mistake to begin with. They should have invaded Hawaii

        Those things may have resulted in a whole different outcome

        So far as the Chinese they are still building the islands and nobody is stopping them so the strategy is working for them

        1. Many in Japanese leadership thought they could win a sustained war.

          Yamamoto had seen US industry’s results and the wealth of average Americans and KNEW that Japan could not win a sustained war against the USA.

          Hawaii was not the end all for Japan’s defeat. I really would never have altered the outcome of WWII for Japan even if they destroyed everything on Hawaii or invaded.

          Most of the ships used to help defeat Japan were built after 1941 or were located away from Hawaii.

          In the end it was the atomic bombs which would have still be created in 1945 and the USSR quick invasion of Manchuria and Kurile Islands that ended WWII.

  8. Alt-headline: “When Trump and Xi meet next month, something or nothing could happen.”

  9. With the game of chicken we are playing in the S China sea we are not far from a real war with China.

  10. I remember when people wanted Bill Clinton to drop China’s MFN (Most Favored Nation) status which directly affected tariff rates between the two countries.

    Man how times have a’changed.

  11. Normally I find posting shitty pics of Trump (yes, there are so many) as a lazy form of social signaling. This one is solid, though. Nicely chosen, Eric.

  12. That’ll do pig …. that’ll do.

  13. I hope everything will calm down

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