Trump’s do-no-harm summit with Xi

Por Daniel Desrochers, Phelim Kine, Ari Hawkins and Oliver Ward — POLITICO – TOP Stories

President Donald Trump’s lavish summit with Chinese leader Xi Jinping bought the White House time — and little else.

Shortly after Xi touched down in Washington Wednesday night, Treasury Secretary Scott Bessent announced he and his Chinese counterpart had agreed to a short-term extension of the two countries’ trade truce, ensuring the world’s most consequential economic relationship will remain stable until well after the U.S. midterms.

But after a day of meetings, a viewing of the U.S. Constitution at the National Archives and a glitzy state dinner featuring top executives from the U.S. tech, banking and industrial worlds, there were few signs the Trump administration had secured major breakthroughs that would shift the dynamics surrounding China’s critical minerals chokehold, agricultural trade, tech coordination or other priorities for key industries and voting blocs.

“You’ve now had two state visits that haven’t delivered much on the commercial or economic front,” said Brett Fetterly, a longtime Republican foreign policy adviser now at The Asia Group consultancy firm. “There’s a big question regarding whether or not you can really tout anything on why the U.S. president is sitting down with Xi 39 days ahead of the midterms that will help electorally right now.”

More than a year into a fragile trade truce with China, American exasperation with high prices has undercut the administration’s hand in its economic rivalry with Beijing. Republicans across the country are breaking with Trump weeks ahead of a midterm election, rejecting his trade policies and calling for an end to the Iran War as they seek to show voters they feel their economic pain.The result is a chastened Trump, with a hampered ability to threaten the economic pain necessary to secure real commitments from Xi to release China’s grip on critical minerals flows, which Beijing continues to restrict, help secure AI technologies or buy more U.S. products — let alone some of the bigger structural changes to the economic relationship that the White House had once envisioned. Trump’s main objective going into the meetings in Washington was simply not to rock the boat.

“I think it’s hard to get a lot of concessions out of China at any time,” said a trade lobbyist granted anonymity because they were not authorized to speak publicly. “But leading up to the midterms, it’s all the more challenging because I think China knows very well that it would be very unlikely that the White House would be willing to impose high tariffs right now,” one of Trump’s main sources of leverage.

In securing an extension of the trade truce until January, the Trump administration did buy more time to negotiate with China — and avoid a blow-up that could trigger a return to triple-digit tariffs and the draconian export controls on critical minerals and semiconductors that roiled the global economy last fall. Beijing flexed its control of the mineral supply chain by choking off exports of those crucial manufacturing materials to U.S. civilian and defense industry manufacturers.

The president and Xi met in Busan, South Korea in October to hash out the initial truce freezing all those measures. They were set to expire on Nov. 10; this week’s delay punts the issue until well after a midterm election in which trade and affordability are a primary focus of lawmakers in both parties.

“If this did expire around November, we would see a lot of headlines in the news about, you know, ‘the trade war with China is back,’” said Jacob Jensen, director of trade policy at the center-right think tank the American Action Forum. “If the trade truce wasn’t extended, there might have been an escalation.”

But even if the White House rolls out a new Chinese pledge to buy more U.S. crops — as Trump hinted Friday — or joint commitments to reduce tariffs or coordinate on artificial intelligence, it will largely maintain the status quo, which is not likely to buy Trump much goodwill with the affected U.S. industries or midterm voters.

“The summit reinforced a familiar pattern — greater predictability at the top without resolution of the underlying commercial and strategic disputes,” said Craig Singleton, a former national security official with deep expertise on U.S.-China relations. “There was no movement toward relaxing U.S. export controls on advanced chips or semiconductor equipment, China remains behind on key agricultural purchase commitments, rare-earth access remains constrained, and the Board of Trade and other non-tariff issues still require substantial negotiation.”

One of the most concrete outcomes of the summit was the confirmation that Xi and Trump will meet twice in the next three months, resulting in an unprecedented four face-to-face encounters between the two leaders in a calendar year. That will give the White House more chances to deliver on some of the lingering policy disputes.

“Looking ahead to the remainder of this year, there will be two more opportunities for us to meet each other. Firstly, the APEC meeting in China, and then the G20 summit in the United States,” Xi said to Trump a televised tea ceremony at the White House Friday. The U.S. president later confirmed on social media that the two will meet at APEC on Nov. 18 and 19 and at the G20 leaders meeting on Dec. 14 and 15 at Trump’s golf course in Doral, Fla.

Trump also hinted that China had promised new agriculture purchases. “I think our farmers are going to be very happy. A lot of very positive things happened,”’ the president said, without providing details. The White House declined to comment.

The Trump administration managed expectations going into the meeting, suggesting that tariff cuts and other expected results might not come immediately. While some lawmakers and industry groups were pushing for Trump to broker guardrails on artificial intelligence developments, Trump said ahead of the meeting he and China shared a desire “to leave it exactly where it is.”

“This summit will likely do nothing to curb the competitive instincts of both sides on AI,” said Daniel Kritenbrink, former assistant secretary of state for East Asian and Pacific Affairs in the Biden administration. “Both sides want to ‘win’ this race — I don’t think you’ll see any slowing down.”

U.S. Trade Representative Jamieson Greer on Friday stressed that the U.S. and China did not intend to overhaul trade relations in the short term, either.

Instead of touting immediate tariff reductions, Greer told CNBC’s “Squawk Box” that both sides have “reached agreement” on types of goods where, “if we have trade disputes in the future or if there are tariff measures in the future, we just leave those things to the side.”

Ambitions had been higher earlier this summer. Greer and Bessent had billed the summit as a chance to stabilize relations and lay the groundwork for tackling thornier disputes. Corporate America hoped it would open the door to more tariff cuts, via a proposed “Board of Trade” the administration announced last spring.

“We need the ‘Board of Trade’ to be more than just a tariff renegotiation or tariff lowering exercise,” said an industry representative, granted anonymity to speak candidly about the business community’s concerns. “It really needs to come up with some sort of construct so that we can continue to have the stability and the dialogs needed to keep the bilateral relationship from swinging.”

They also were encouraged by Trump’s repeated calls to let Chinese automakers build in the U.S., hoping it would encourage more investment in both directions.

But the main vehicle to enable those capital flows, a proposed investment board, stalled despite the president’s backing. USTR and some Treasury officials feared blowback from Republicans in Congress and in the states, who have cracked down on Chinese investment in the private sector over security concerns, according to four people with knowledge of the discussions granted anonymity to describe private deliberations.

Privately, Treasury officials called the board a “political loser.”

Many U.S. business groups and lawmakers had also pushed for a much larger set of deliverables, covering AI safety, sales of advanced chips to China, U.S. port fees on Chinese vessels and human rights.

“There was so much focus on the ceremony and the pomp and circumstance, and the tours of various aspects of the White House, that I’m not sure how much time was actually dedicated to the real difficult substantive issues,” Kritenbrink said. “I am particularly struck by the number of U.S. officials who have articulated their profound frustration with the Chinese side, given their view that China has largely not lived up to the commitments it made at Busan and Beijing.”

American business leaders have also stressed that despite the agreements Trump and Xi have inked, China continues to limit the export of critical minerals, which the U.S. auto sector, technology companies and defense manufacturers all rely heavily on — as do much of the world. China still controls the mining and processing of a large number of critical minerals, from the gallium used in certain defense weaponry to the lithium refineries used to make car batteries.

China is also not on track to meet its pledge from Trump and Xi’s Beijing summit last spring to buy at least $17 billion in U.S. farm products this year, not including soybeans, which it agreed to purchase annually through 2028. Greer teased an announcement containing more details on those purchases on Monday. But some American industry stakeholders won’t be impressed by the continued promises.

“Agriculture commitments from China are like that one friend you keep lending money to and they promise they’ll pay you back but they never do,” said one representative from an industry group granted anonymity to speak candidly about the negotiations.

While the two-month extension of the trade stalemate punts the deadline further beyond the midterms, it only extends the economic limbo for U.S. businesses, which have been itching for more certainty in the U.S-China trade relationship.

The slim extension is a “hard pill,” said the industry official. It “obviously will not be sufficient to provide that kind of certainty that our companies need.”

Fonte: POLITICO – TOP Stories