US President Donald Trump and Chinese President Xi Jinping are about to meet in in Busan, South Korea. Photo / Getty Images
The latest round of brinkmanship could end in a display of bonhomie.
Only weeks ago, there were suggestions that United States President Donald Trump might call off his planned face-to-face meeting with Chinese President Xi Jinping, scheduled for today on the sidelines of a summit in Busan, South Korea.
Trump threatened an additional 100% tariff on Chinese goods, part of a series of escalations between the two sides that also included China’s imposition of sweeping new controls over the export of rare earth minerals vital to US companies.
Initial talks between US and Chinese officials in Malaysia this past weekend have now lowered the temperature.
Trump may emerge from the Xi summit touting a slate of perceived wins - a deferral of Chinese restrictions on rare earths, some sort of deal over the status of popular social media app TikTok, and relief for US farmers after Trump’s tariffs provoked a Chinese boycott of US-grown soybeans.
The White House will cast the outcome as proof of the efficacy of Trump’s unorthodox tactics. Treasury Secretary Scott Bessent said Trump’s tariff threats had given him and his team “a great deal of negotiating leverage” with their counterparts from Beijing.
It’s not clear, though, that Trump has the advantage in the current showdown.
The apparent deal on offer signals little more than a resumption of the status quo from around when Trump returned to office in January and serves as vindication of China’s own hardball approach to the Trump Administration’s coercive tactics.
For all the initiatives by the US to buttress its critical minerals supply chains, China’s chokehold over the mining and processing of much of the rare earths essential for modern-day technologies isn’t about to end, nor will Beijing stop using its dominance in this sector as leverage over the US.
There are other reasons why Xi may feel confident.
Trump’s trade wars have unsettled traditional US allies and led to rifts between Washington and some of the emerging powers of the Global South, including Brazil and India.
Governments in European countries and Canada are all pondering how to better insulate themselves from Trumpist over-reach and caprice, which may invariably mean finding new accommodations with China.
Trump - who has long championed his ability to make bilateral deals with adversaries over the value of co-ordinating policy with a host of allies - has enabled Beijing to cast itself as the responsible actor in global politics in the face of a disruptive US bully.
“Xi is not playing the cards he has - he’s playing the player he’s up against,” Rush Doshi, a former Biden administration official and author of The Long Game: China’s Grand Strategy to Displace American Order, told me.
“He thinks that President Trump will fold, and his bet may have been proven right.”
That’s a fear shared by other China watchers in the US.
This month, Matt Pottinger, an influential China hawk who was deputy national security adviser during Trump’s first term, warned that “Trump’s policy direction is murkier” in Asia.
He pointed to the alienation of Indian Prime Minister Narendra Modi (who was seen by successive US administrations as an important ally in the contest with China).
Also, the “unilateral concessions to Beijing, weakening US restrictions on the export of powerful AI chips” and Trump’s “chilly treatment of Taiwan” amid increasing concerns that Trump may downgrade US commitments to the self-ruling island because of his dealings with Beijing.
Trump’s retreat from the latest tariff threat doesn’t signal a strong hand.
“Trump has conceded that the current US tariffs on China are unsustainable,” noted Ali Wyne, an analyst on US-China relations at the International Crisis Group, in an email.
“The question is whether that conclusion will yield greater humility in his Administration’s economic policy going forward.
“The US can only do so much unilaterally to stymie China’s economic development, and meaningfully reducing its dependence on China’s rare-earth exports will likely prove to be a decades-long undertaking.”
In the meantime, other countries operating in the shadow of the US-China tussle are reckoning with the aftershocks of Trump’s disruptive measures.
“There is no doubt it will be messy and unpredictable because America is stepping back from its role as global insurer but there’s no other country that is able or willing to fill the vacuum,” Singaporean Prime Minister Lawrence Wong said, referring to the emerging new global order during a recent interview with the Financial Times.
China is not about take up the mantle of the Pax Americana.
“It’s still a middle-income country with a lot of domestic challenges,” Wong said. “So, there is no new global leader yet emerging, and we are in this very unpredictable, messy period of transition.”
Beijing sees this as well.
“Frequent withdrawals from international agreements and the formation of exclusive blocs have posed unprecedented challenges,” Chinese Foreign Minister Wang Yi said in a speech this week, lobbing thinly veiled jabs at Trump.
“Yet the tide of history cannot be reversed - a multipolar world is emerging.”
Wang decried Trump’s trade wars and said: “blind faith in power politics and bullying will only push the world towards chaos and undermine the foundations of international systems and rules”.
Beijing has unveiled a new “initiative” around global governance, an airy statement of principles that spotlights China’s commitment to multilateralism, international co-operation and free trade.
Western analysts may not buy this image of China, whose rise has been powered by its distinct brand of state-backed mercantilism.
But China is pitching itself to nations across Asia and Africa as a generous partner, eager to draft new free trade deals and zero-tariff agreements. “China may not win the argument,” said Doshi, “but it’s winning the game.”
In the chaos of the Trump era, some of China’s competitive advantages are becoming clearer.
It’s racing ahead of the US in being a producer and exporter of green technology and renewable energy.
As Trump grandstands over the “scam” of green policies, China is leading the world in the production of everything from solar panels to batteries to electric vehicles.
The products of China’s booming EV sector are crowding the streets of world cities from Kathmandu to Sao Paulo. And they may make further inroads thanks to Trump’s own retreat from providing subsidies to US electric vehicle production and his bullying of allies.
Stung by Trump’s renewed punitive approach, Canada is reportedly considering dropping its 100% tariff on China’s electric vehicles.
That’s an outcome that would have been unthinkable under the Biden administration, whose own attempts to engage China was characterised as pointless “zombie diplomacy” by Trump allies.
Doshi concedes that the former administration perhaps over-indexed on “persuasion” in its wrangling with Beijing and could have attempted more Trump-style coercion.
But the complexity of competing with China requires more than a unilateral American effort.
“What we need against the China challenge is a form of collective action [of like-minded allies], but you need someone to anchor that sort of action,” Doshi told me. “Trump has undermined it.”
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