8 December 2018

There Is No Grand Bargain With China

By Ely Ratner

In true showmanship fashion, U.S. President Donald Trump is keeping the world in suspense about whether he will soon double down on the United States’ trade war with China or call a truce. The big reveal will come after his meeting with Chinese President Xi Jinping on the margins of the G-20 in Buenos Aires later this week. Trump has at times been optimistic, telling reporters, “I think a deal will be made. We’ll find out very soon.”

Don’t believe the hype. Any agreement in Argentina will be a tactical pause at best, providing short-term relief to jittery stock markets and beleaguered U.S. farmers, but having no material or long-lasting effect on the slide toward a high-stakes geopolitical competition between the United States and China. The days when the world’s two largest economies could meet each other halfway have gone.

Over the course of his first five-year term, Xi passed up repeated opportunities to avert rivalry with Washington. His increasingly revisionist and authoritarian turn has instead eliminated the possibility of a grand bargain between the United States and China. On most issues of consequence, there is simply no overlap between Xi’s vision for China’s rise and what the United States considers an acceptable future for Asia and the world beyond.

DEAL OR NO DEAL

Whether Trump and Xi reach some short-term accommodation in Buenos Aires is anyone’s guess. There are substantial divisions within the Trump administration and no policy process to adjudicate them. As a result, the White House has neither an agreed-upon bottom line nor a clear negotiating strategy. Bilateral negotiations have been flailing in fits and starts, leaving China guessing what might ultimately satisfy Trump.

The meeting in Buenos Aires may well fail to curb the president’s appetite for more tariffs

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