[After teetering several times on the brink of resolution, the trade war between the world’s economic superpowers appears to have entered a dangerous new phase this month, with new rounds of retaliatory tariffs and a demand from Trump that U.S. companies stop doing business with China.]
By
Anna Fifield
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President
Trump and Chinese leader Xi Jinping during a bilateral meeting alongside
Group of
20 talks in Osaka, Japan, in June. (Brendan Smialowski/
AFP/Getty Images)
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BEIJING
— Keeping China guessing is
all part of a strategy to gain the upper hand in the trade war, President Trump
suggested after a whiplash-inducing series of contradictory and confusing
statements about relations between the world’s two largest economies.
“Sorry! It’s the way I negotiate,” he told
reporters Monday in Biarritz, France, at the end of the Group of Seven meeting.
“It’s done very well for me over the years. It’s doing very well for the
country.”
But in China, there is relatively little
confusion about Trump these days.
More than a year into the trade war,
officials and analysts feel that they’ve got a handle on the tweeter-in-chief
and how to ride out the ups and downs.
“I think that there is a lot of fatigue with
President Trump’s ‘art of the deal,’ ”
said Wang Huiyao, president of the Center for China and Globalization and an
adviser to China’s cabinet.
“It’s like a roller coaster. Buenos Aires,
Osaka, Shanghai. He says one thing one day then hits the world with a surprise
the next day,” Wang said, referring to agreements that Trump or his officials
have struck, only to do an about-turn shortly afterward. “The more they deal
with him, the more they figure him out.”
That also has helped shape a master plan for
dealing with the Trump churn.
“I think they’ve decided Trump is a
vacillating guy who can’t figure out what he wants and gets spooked every time
the stock market goes down or someone accuses him of not being tough,” said
Arthur Kroeber, managing director of GaveKal Dragonomics, a consultancy in
Beijing.
“Although there are problems in China, they
believe they have their economy under control, more so than Trump. They think
he is more vulnerable to a slowdown and that they can afford to wait him out,”
he said.
After teetering several times on the brink of
resolution, the trade war between the world’s economic superpowers appears to
have entered a dangerous new phase this month, with new rounds of retaliatory
tariffs and a demand from Trump that U.S. companies stop doing business with
China.
That has caused alarm across the globe, with
fears that the war could help tip leading economies such as Japan and Germany
into recession and create new head winds for the American economy. China’s
growth rate has, meanwhile, slowed to its lowest rate in three decades.
China’s government, like many around the
world, was initially mystified at Trump’s unconventional presidential style,
and the country’s leader, Xi Jinping, is rumored to have come in for some
criticism at a 2018 retreat for underestimating Trump’s resolve to tackle
China’s trading practices.
But emerging last week from this year’s
Communist Party confab at the beach resort of Beidaihe, China’s leadership
appears to have decided to hunker down. In the land of Sun Tzu and “The Art of
War,” many now seem unimpressed with the art of Trump’s dealmaking.
“What’s the point of calling Xi Jinping ‘a
good friend’ and ‘a great leader’ but still increasing tariffs?” asked Yao
Xinchao, a trade professor at the University of International Business and
Economics.
“He’s a 70-ish-year-old man but speaks like a
7-year-old kid. We just can’t listen to what he says now. I think Chinese
leaders have realized this, too — not listening to him but watching what he
does and then countering,” Yao said.
Wang Yiwei, a professor of international
relations at the Renmin University, shares a similarly disdainful view. “He is
a real estate developer; he is a profiteer in the eyes of the Chinese people,”
he said.
But the bottom line remains that China, which
is experiencing a marked economic slowdown, wants a deal to resolve the trade
war.
“The trade dispute between China and the U.S.
should be resolved through dialogue and consultations,” Foreign Ministry
spokesman Geng Shuang said Tuesday, adding that the United States’s “maximum
pressure approach hurts both sides and is not in the least constructive.”
“We hope that the U.S. can exercise
restraint, return to reason, and demonstrate sincerity in order to facilitate
further consultations on the basis of mutual respect and mutual benefits,” Geng
said.
The question now is how the two sides find a
way out of the standoff.
Wei Jianguo, a former vice minister of
commerce, said that Trump’s efforts to browbeat countries into a deal — like
Canada, Mexico and Japan — will not work with China.
“We have seen and understand Trump’s style,”
Wei said. “If he thinks he can secure an advantage for the U.S. and wear China
down by exerting various kinds of extreme pressure, he’s dreaming. It’s
impossible.”
Instead, China needs some face-saving and
some respect, said Wang of the Center for China and Globalization.
“He can’t come at us with a stick in his
hands,” he said. “The way Trump talks really jeopardizes the whole atmosphere.”
The longer this pattern continues, the more
China becomes concerned that any deal won’t stick.
“Now
China understands him thoroughly and knows that inconsistency is his nature,”
said Wang of Renmin University. “Even if an agreement is signed, he may not
implement it well. But, without an agreement, he does this over and over again,
which is also very annoying.”
Many analysts expect the dispute to continue
to November at least, when the two leaders are likely to meet at a summit of
Pacific Rim nations in Chile.
Before then, Xi is facing a growing crisis in
Hong Kong — another front where he can’t afford to look weak — and is preparing
to celebrate in the first week of October the 70th anniversary of the Communist
Party’s takeover of China.
In the meantime, a deal appears to be moving
farther away.
“With each step that Trump has taken since
May, he has reduced the chances of striking a deal,” Kroeber said, referring to
the tariffs and threats to blacklist Huawei Technologies. “He keeps throwing in
new things that he would then have to take away to get a deal.”
Liu Yang, Wang Yuan and Lyric Li contributed
to this report.
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