China seems to have a markedly different view of the trade war cease-fire reached with the Trump administration over the weekend, with state media outlets making no mention Monday of a 90-day time frame or a reduction in tariffs on imported U.S. cars — or indeed any specifics about buying more American products.
That raises the prospect that the two sides have come away from their meeting in Buenos Aires, on the sidelines of the Group of 20 summit, with very different ideas about what comes next.
“Do we have another Singapore summit, where the North Korean delegation went home with a very different set of perspectives?” asked Paul Haenle, an Asia adviser to presidents George W. Bush and Barack Obama now running the Carnegie-Tsinghua Center in Beijing. He was referring to the June summit between President Trump and North Korean leader Kim Jong Un, which seemed to produce different definitions of the word “denuclearization.”
In the absence of a joint statement or joint news conference after their meeting, each side has been putting its own spin on the Buenos Aires summit and its outcome.
Trump portrayed the agreement as a second chance for President Xi Jinping, saying he would give the Chinese leader 90 days to deal with the structural issues in the trading relationship — such as forced technology transfers and industrial espionage. If no deal is reached in that time frame, the American president said, he would go ahead with his previous plan to raise tariffs on $200 billion in Chinese products from 10 percent to 25 percent, which had been due to kick in Jan. 1.
Trump had been threatening to increase the existing tariffs and impose new tariffs on the remaining $267 billion worth of goods that China sells to the United States each year.
Trump tweeted late Sunday that China “has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.”
[U.S. and China agree to new talks as Trump pulls back on tariffs ]
But there was no mention of any of this here Monday.
The People’s Daily, the official newspaper of the Chinese Communist Party, ran a photo at the top of Monday’s front page of Trump and Xi shaking hands and smiling. But the story, while stressing agreement and cooperation, said nothing about buying “very substantial” amounts of U.S. agricultural, industrial and energy products, as the White House said, and nothing about the 90-day deadline. Nor was there anything about tariffs on car imports into China.
Nor did news bulletins on CCTV, the state broadcaster, include any mention of buying more U.S. goods or coming to an agreement within 90 days. Only the nationalist Global Times tabloid mentioned the time frame, and that was attributed to the White House alone.
Neither was there any sign of the White House contention that Xi had promised to reconsider Qualcomm’s bid to buy NXP Semiconductors, a Dutch rival. The $44 billion deal collapsed after Qualcomm, the U.S. smartphone-chip maker, failed to get Chinese regulatory approval.
What Chinese state media outlets did say, however, was that the two sides would work to “gradually” decrease the trade imbalance — a statement that appears to be at odds with the rapid progress that Trump wants.
Chinese Foreign Ministry spokesman Geng Shuang did little to clear up the discrepancies Monday, saying that the two sides’ readouts from the meetings spoke for themselves.
“I only want to stress that the two leaders reached important consensus and the teams on the two parts will follow through on the consensus,” he said at a news briefing. The two sides would “speed up” their talks and “attempt to conclude a mutually beneficial agreement at an early date.”
Asked specifically about the 90-day deadline, the spokesman demurred. “I think you should focus on that we discussed and agreed,” he told reporters. “We agreed to hold off on imposing new tariffs. This agreement is quite significant since it has stopped our trade dispute from escalating and also opens up new prospects for win-win cooperation.”
Chances are that both sides are “cherry-picking” the details that suit them, said Zhao Hai, an economics specialist at the Chinese Academy of Social Sciences in Beijing.
While Trump has come under fire from industries that are suffering from the Chinese tariffs, such as soybeans and pork, Xi also is navigating sensitive economic terrain at home. The Chinese economy was already slowing before the trade war erupted.
Stock markets, at least, seemed relieved at the truce, however temporary. China’s benchmark Shanghai composite index closed up 2.57 percent Monday.
“This is hopefully a turning point for both sides to stop and rethink the direction they were heading in,” Zhao said. But the “downside” was the 90-day time frame set by Trump. “The U.S. needs to lower its expectations,” he said.
Indeed, other analysts said that the delay in tariffs appeared to be win for China.
“The Chinese are always playing for time and any pause that involves more talking is a victory for Beijing, as it only adds to the chances they have for a shift to a more favorable US domestic political environment,” wrote Bill Bishop, publisher of the influential Sinocism newsletter.
“As we have learned with the waning ‘maximum pressure’ campaign on North Korea, once you step back from the brink it is difficult to marshal the support to return to it if the talks do not bear fruit,” Bishop said.
The real question now is whether the world’s two biggest economies can make progress on substantive matters in the next three months. Just having China buy more U.S. goods and shrinking the trade deficit will not solve the broader structural problems in their economic relationship.
“Is China going to make the changes that the international community desperately hopes that China makes, so that foreign companies can compete on a level playing field?” asked Haenle of Carnegie-Tsinghua.
These changes include allowing greater access to the Chinese market and stopping foreign companies from having to hand over their technological secrets as a condition for operating in China.
Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation, doubted that the truce would lead to a solution to the long-term trade problems.
“The two sides seem to have a very different understanding of the priorities when it comes to handling the structural problems,” Mei said. “The United States thinks it’s all about unfair trade practices, while China believes it’s about low national savings. It’s one problem with two interpretations.”
Given that, Mei was not optimistic about what would come after the 90-day truce. “I think we should be prepared for the protracted war,” he said. “Personally, I’m preparing for the U.S. to impose tariffs on all Chinese exports.”
