The G20 summit in Buenos Aires is supposed to be the venue for a high-stakes agreement between President Trump and Chinese President Xi Jinping.
Hanging in the balance are new tariffs on everything that the U.S. imports from China. But if Trump sticks to the demands outlined by Vice President Mike Pence, there will be no deal in Argentina, just more tariffs and a trade war stalemate. Instead of trying to push China on every policy the U.S. takes issue with, Trump would be wise to get an agreement on trade and claim a quick victory.
[More: Trump administration’s trade talks with China back on, as tariffs loom]
On Wednesday, Pence made clear that if the U.S. and China are going to avoid additional tariffs on more than $257 billion worth of goods and the much-talked-about possibility of a cold war, Beijing must be prepared to make fundamental shifts — and not just when it comes to trade.
Washington wants China to offer concessions on legitimate economic issues like intellectual property theft, forced technology transfer, and restricted access to Chinese markets. But Trump will also demand respect for international rules and norms, a pullback of the Chinese limitations on freedom of navigation in international waters, and an end to interference of the Chinese Communist Party in the politics of other countries.
Those asks might sound reasonable to a U.S. observer, given China’s Belt and Road Initiative and the power it has brokered with development dollars as well as its territorial claims in the South China Sea. But Beijing is unlikely to offer the concessions that will be agreeable to Washington on these issues. These demands also play into the narrative that what Trump wants is not just better trade but also the containment of China’s power.
For Xi Jinping, that makes the demands a non-starter. His legitimacy at the top of the Communist Party in China depends on his self-assigned position as the strong leader who won’t be forced into submission. And meeting Trump’s demands would be understood as capitulation to the West and allowing interference in China’s internal matters. For a host of political reasons, including the politicized historical memory of the Opium Wars that underpins modern CCP legitimacy, Pence’s list of asks is politically difficult if not impossible for Xi to grant while retaining his power at home.
Increasing U.S. demands matched with strong resistance from China make the meeting a political quagmire. Since the White House itself has set the stakes and has been championing a tough line on China, Trump has also put himself in a pinch to avoid the self-imposed consequences of additional tariffs.
With no agreement likely, the immediate consequences will be not only higher consumer prices in the U.S., higher costs for businesses and a further erosion of the impact of Trump’s tax cuts, but also an overall worsening relationship between Beijing and Washington. That’s a real concern as a conflict could well escalate beyond tit-for-tat tariffs as highlighted by Pence’s “so be it” stance on a possible cold war.
In short, Trump cannot get China to an agreement by simply heaving more and more demands on them, and the clock is ticking toward Nov. 30 and new tariffs.
