The core goal of the meeting between Donald Trump and Xi Jinping was clear enough: bring the temperature down and strike some agreements that would stabilise one of the world’s most important bilateral relationships. On this score, the summit can be declared a success. Trump was beaming after the hours-long discussions and characteristically sought to display the results as the beginning of a new era. “Zero, to 10, with 10 being the best, I’d say the meeting was a 12,” he told reporters on Air Force One. “A lot of decisions were made… and we’ve come to a conclusion on very many important points.”
In and of itself, this is significant. Sure, Trump and Xi didn’t resolve all of the issues that have caused such acrimony in the U.S.-China relationship, but nobody with their head screwed on correctly thought that was ever going to happen. It wasn’t so long ago that Washington and Beijing were slapping each other with tariffs so severe that they practically halted bilateral trade. And it was only weeks ago that Trump, upset about China’s heavy restrictions on the export of rare earth elements, threatened to impose an extra 100 per cent tariff by Nov 1 if the Chinese didn’t reverse course.
Well, they have reversed course—at least for the time being. Some of the rare earth export controls will now be suspended for a year. The Chinese will also import U.S. soybeans again, providing American farmers with financial relief. In return, Trump has agreed to half the tariffs he instituted on China on the fentanyl issue, purportedly in return for greater Chinese cooperation in staunching the flow of chemical precursors. In addition, the U.S. will postpone an investigation that could have increased fees for Chinese ships docking in American ports. China will do the same.
In other words, you can call this entire arrangement a truce in a trade war that is still technically in effect. The outstanding, systemic problems—China’s state-supported industrial policy; the dumping of cheap Chinese goods abroad; U.S. semiconductor export controls; Taiwan—are still lurking in the wings. If you were a gambler, the smart money would be on this cooling-off period eventually evaporating into another round of rancour as the same old issues rise again to the forefront.
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