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Nov. 29, 2018 / 10:00 AM GMT
By Jonathan Allen
BUENOS AIRES, Argentina — When it comes to starting a trade war — and ending one — it takes two to tango.
President Donald Trump arrives here for a G20 summit Thursday with Chinese President Xi Jinping — and their eye-for-an-eye trade dispute — at the top of his dance card, a scheduled talk with Russian President Vladimir Putin below it and a possible encounter with Saudi Crown Prince Mohammad bin Salman not yet penciled in.
Most of the action will occur on the sidelines of the official meetings in this European-style capital city that features narrow brick roads, Spanish and Parisian architecture, and cafes on nearly every street corner.
It is Trump’s working dinner with Xi on Saturday night that holds the most obvious potential peril — and promise — for the United States.
The two leaders are set to break bread as the U.S. is poised to increase levies on a range of Chinese goods from 10 percent to 25 percent on Jan. 1, with Trump threatening to tax China across the board and Beijing positioned to retaliate.
Trump told The Washington Post this week that he wants to force China to make concessions to the U.S., but is perfectly happy to walk away from the table.
“I think we’ll either make a deal or we’ll be taking in billions and billions of dollars a month in tariffs, and I’m OK with either one of those two situations,” he said.
Many U.S. trade experts say that the most productive course of action for the two countries would be to set up a broader dialogue aimed at striking a pact in the future rather than prematurely announcing an uncooked deal this weekend.
“You can tango after dinner in Buenos Aires on a Saturday night. You cannot conclude a trade agreement between China and the United States after dinner in Buenos Aires on a Saturday night,” said Hamilton Place Strategies founder Tony Fratto, who worked on G20 summits as a spokesman in the George W. Bush administration. “This relationship is too big. It is too complex.”
The “most dangerous outcome,” he said, “is something that looks like the North Korea discussions” — where Trump announced a nuclear deal this summer, only to watch it fizzle.
While Trump says China is desperate to make a deal, there are reasons for Beijing to hold off, according to Aaron Friedberg, a professor of politics and international affairs at Princeton who advised former Vice President Dick Cheney.
One is that the expansion of tariffs to more consumer goods could hit voters in the wallet just as Trump is ramping up his 2020 re-election bid. In that scenario, Trump might be more likely to back down without big concessions from China in order to improve his political standing.
The other, Friedberg said, is that the U.S. is demanding fundamental changes to China’s manufacturing and technology promotion policies.
“I think the likelihood of the Chinese being willing to concede on that is really low because it’s so central to their model and their plans,” Friedberg said. “In addition, they have been for some time been looking for a way to essentially give the president a win. They have been somewhat surprised it hasn’t been easy.”
Trump’s meeting with Xi also comes at a time when his brand of nationalism — and that of some other prominent world leaders — has put the G20’s mission of fostering international financial stability through multilateral cooperation to the test.
David Mortlock, chair of Willkie, Farr & Gallagher’s Global Trade and Investment Group, said that it’s possible Trump could win some small concessions from China or herald a “deal in name only” at the end of the summit.
But Trump is letting Xi off the hook by not enlisting allies to force Beijing to fundamentally change the way it operates across the globe, said Mortlock, who worked as an economic official on President Barack Obama’s National Security Council.
“Under either scenario, while Trump may achieve some progress on short-term bilateral trade issues, his focus on tariffs and reluctance to use multilateral and other diplomatic tools to shape China’s behavior is likely to give China wide latitude to shape its own rules of the international economy in the long-term,” he said.
Russia and Ukraine
Trump and Putin are expected to meet here for the first time since they followed up a one-on-one session in Helsinki this summer with a wild press conference.
Trump cast some doubt on that in his interview with the Post, saying that he might cancel as a result of Russia firing upon Ukrainian ships in a strait between the Black Sea and the Sea of Azov on Sunday.
But Moscow said Wednesday that the bilateral talks are still on.
“Preparations are continuing,” Kremlin spokesperson Dmitry Peskov said. “The meeting has been agreed [upon]. We have no other information from our U.S. counterparts.”
It is unclear whether Trump will raise that issue with Putin when the two talk.
Former CIA Director John Brennan, a frequent Trump critic, said the president should push back.
“I think he needs to underscore just how serious the situation is right now in Ukraine-Crimea area and how it can escalate and how the United States is not going to tolerate this type of Russian aggression in these waters,” he said in an interview with Andrea Mitchell on MSNBC. “I don’t know whether or not Donald Trump has the gumption to do that and the intestinal fortitude.”
Saudi Arabia
Despite the CIA’s “high confidence” analysis that Saudi Crown Prince Mohammad bin Salman ordered the murder of Washington Post journalist Jamal Khashoggi, Trump has said the report was inconclusive, and has declined to sanction the crown prince.
But Republicans and Democrats in Congress have been critical of the administration’s response.
On Wednesday, just hours after Defense Secretary Jim Mattis and Secretary of State Mike Pompeo briefed senators on the Khashoggi case and U.S.-Saudi relations, the Senate signaled its anger at Saudi Arabia and the administration by approving a procedural motion, 63-37, that is designed to halt U.S. participation in Saudi Arabia’s war in Yemen. The administration opposes the resolution.
As of now, Trump is not currently scheduled to meet with bin Salman.