Analysis on the Trump-Xi Summit at the G20 Summit in Argentina

No. 2018-46 (December 3, 2018)

Dr. Lee Seong-hyon

Director, Center for Chinese Studies

The Sejong Institute

sunnybbsfs@gmail.com

- Problem postponed, not solved

- The “Trump factor” is still pregnant with uncertainty

- The Structure of Structural Confrontation between the U.S. and China remains intact

“A highly successful meeting.” This is how the White House evaluated the working dinner meeting between Presidents Trump and Xi in Buenos Aires, Argentina. President Trump reiterated his personal rapport with President Xi, “My relationship is very special, the relationship that I have with President Xi.” This reconfirmed the old dictum in diplomacy, ‘there is no such thing as a failed summit.’ The key is the content of the negotiations. Technically speaking, the talks did not solve the issue, but rather concluded with a ‘stopgap.’ Hence, the uncertainty of the Trump factor persists after the ’90-day truce.’ Moreover, the U.S.-China structural confrontation has remained fundamentally unchanged.

‘Temporary truce,’ the American media CNN evaluated the meeting as such. While the details of the dialogue between the two leaders are undisclosed, the Hong Kong-based South China Morning Post reported, “Both sides appeared satisfied at the end of the gathering, and applause was heard in the room as the dinner drew to a close.” However, no summit ends without a handclap.

According to the White House statement, “on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time.” The statement added that the temporary remission is conditional.” 

On the contrary, China pledged to “purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries.” [1]

At the very least, the tangible outcome of this summit was China’s agreement to import U.S. agricultural products immediately. This will presumably include corn and beef products from the U.S. Midwest including Iowa.

The U.S. and China both agreed to commence negotiations on ‘structural changes’ immediately. These ‘structural changes’ encompass ‘forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.’

The two countries also agreed that they will attempt to wrap up the talks within the following 90 days. Should they fail to reach an agreement by this period, the White House announced that the postponed increase in tariff will be in place — “the 10% tariffs will be raised to 25%.”

If one examines the White House statement, the summit resembles more of a ‘temporary truce’ as CNN described rather than a ‘settlement’ of a trade war — a ‘stopgap’ rather than a ‘resolution.’ It warns that the U.S. will take such-and-such measures once China is unable to satisfy such-and-such conditions. The ‘90-day period’ reads as an ‘ultimatum.’

In the final part, the White House statement allocates one paragraph separately, beginning with ‘with respect to North Korea.’ The paragraph consists of three specifics.  First, the U.S. and China agree that there has been a ‘great progress’ in the North Korea issue. Second, President Trump will strive to see a nuclear-free Korean Peninsula, together with President Xi and Chairman Kim Jong-un. Third, “President Trump expressed his friendship and respect for Chairman Kim.”

It was well known that the U.S. and Chinese leadership met together to untangle the trade dispute which has been escalating tensions between the two countries for several months already. Against this backdrop, why did the North Korea issue emerge suddenly ‘out of context’? Even to the extent of adding a separate paragraph.

After the Obama era, the U.S.-China summit has shown one specific trait—the two countries highlight the agenda that they share a common understanding when the negotiations only yield trivial outcomes. In this case, it was ‘North Korea’s denuclearization.’ It may be positively viewed for South Korea as the leaders of the two global powers express interest in the North Korean nuclear issue. Nonetheless, there could be another reason.

The typical case was the Sunnylands summit between President Obama and President Xi in 2013. South Korean media outlets reported that the two leaders had a frank discussion on the future of the U.S.-China cooperation and particularly agreed to cooperate closely on the North Korean nuclear issue. However, there was a different story to this.

This was already agreed when the-then National Security Advisor Tom Donilon visited Beijing and met with the Chinese authorities. President Obama and Xi did not decide to agree to cooperate on the North Korean nuclear issue at the spot — in Sunnylands. That is, the issue could be accurately regarded as a ‘premeditated’ outcome of the summit in case the two leaders leave the summit empty-handed.

During that U.S.-China summit, President Obama remonstrated strongly regarding the trade imbalance and China’s cyber-hack against the U.S. Department of Defense and President Xi only iterated official statements prepared earlier. Thus, the two countries stood at a standstill in bilateral issues. Therefore, the ‘North Korea’ agenda was included to emphasize the success of the summit.

Mindful of the situation, while it may appear positive to Koreans since the ‘North Korea issue’ takes a ‘portion in the White House statement related to the U.S.-China trade war, it may imply that the bilateral negotiations did not proceed smoothly.

Another signal alluding to the rocky process in the negotiations — unlike the announcements the two countries made — is the Chinese government’s statement on the summit. Although it introduced State Councilor and Foreign Minister Wang Yi’s remarks at the meeting, it even casts doubts whether the U.S. and China were attending the same meeting. The statement does not include the ’90-day period’ that Washington stated as well as other details that the U.S. government emphasized. Moreover, it also states, not only China, but “Both sides agreed to open market to each other”[2]— a point omitted in the White House statement.

Taken together, the summit ended as a ‘makeshift solution’ of which the leaders passed the talks to the working-level officials after they failed to find a breakthrough. The future also seems nebulous. Even though the stock market welcomed the ’90-day ceasefire,’ uncertainty continues. The main question is whether the two countries could resolve the ‘structural changes’ underlying in the U.S.-China trade relations within 90 days, not China’s ‘mass purchase’ of American goods. It is more than a formidable task.