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Words fail.
TRADE WIND

No one can say for sure what Trump and Xi just agreed to

By Heather Timmons

Updated Dec. 4 at 12:30pm EDT.

The White House is hailing the Dec. 1 dinner meeting between Donald Trump and Chinese president Xi Jinping in Buenos Aires as a landmark event that signals huge changes ahead for the warring trade rivals.

However, no one can seem to say what, exactly, Trump and Xi agreed to.

Statements from each country are contradictory about fundamental issues and offer no specifics about what might happen next, and White House officials and the president don’t even seem to agree on the basics. Given the fact that the history of US trade negotiations with China is defined by China agreeing to radical changes and then failing to actually make those changes, the Trump team’s positive spin has been summed up by trade experts as “magical thinking.”

The G20 dinner between Xi and Trump was “just an enormous, enormous event,” Larry Kudlow, Trump’s national economic advisor, told reporters on Dec. 3. When pressed on when and how China might buy more US agriculture and autos—as touted by the White House after the dinner—he couldn’t supply any specifics. What the US and China have agreed to is “not necessarily a trade deal, but stuff they are going to look at,” Kudlow said at one point, noting that nothing at all may come of the talks.

Treasury secretary Steve Mnuchin said Dec. 3 that China had “put on the table an offer of over $1.2 trillion in additional [trade] commitments” without explaining how he came to that number. “The details of that still need to be negotiated,” Mnuchin said.

The White House vs. Beijing

Usually, when two leaders meet for substantial talks, officials from both sides will spend weeks ahead of time planning the discussion and release a joint press statement with agreed-upon language after it is over. Often, there’s a press conference starring both leaders as well, like the one in 2014 with Barack Obama and Xi or the one Dec. 2 with Xi and Argentina’s president.

In this case, the White House and Beijing put out separate, contradictory statements. The American version was just 330 words long. China’s was more than twice that. Chinese officials held a press conference in Argentina. US officials hopped on a plane back to Washington. The net result is plenty of points where they don’t agree, as US and Chinese news outlets have pointed out, including Caixin, a Chinese investigative business news site:

China and the US differ on what, exactly, both sides have promised to do with tariffs, or even on when their deadline is for doing  whatever it is they plan to do. The US said it would suspend adding any additional tariffs on Chinese goods for 90 days, China’s press release makes no mention of that deadline. The US said China will start immediate talks on massive structural changes like protecting intellectual property, Beijing’s statement makes no mention of the topic.

Kudlow said today that the 90 days the US referenced starts on Jan. 1, making it actually 120 days from when it was announced. “We’re going to move very fast,” Kudlow said. “We’re going to have to set up a timetable for the timetables. We haven’t done that yet.” (The last time the Xi and Trump met, the two sides did actually announce a timetable for talks, a 100-day window that came and went without any agreements.)

Then on Dec. 4, Trump contradicted Kudlow, tweeted that the 90-day deadline had already started:

Trump’s rising trade deficit

Whatever is actually going on, the economic policy the White House has imposed so far has had the opposite effect of what Trump intended, spiking the US’s trade deficit with China, pushing it up to a new record in September.

The US trade team that went to negotiate with China has almost no experience living or working in the country. Trump himself said beforehand that he was relying on his gut instinct to guide the negotiations. On the other hand, China’s Xi did much of the negotiations himself in the Dec. 1 meeting, Kudlow pointed out, and knew the trade issues in detail. ”He wasn’t winging it, he was well-prepared,” he said, sounding surprised. “I was impressed.”

Known unknowns

A few things are clear after the Dec. 1 meeting. The US has agreed to suspend any additional tariffs on Chinese goods until the 90-day deadline is over (er, whenever that is). Both sides have pledged to talk about cancelling the new tariffs they’ve imposed since Trump came to office.

Robert Lighthizer, the US trade representative, will be leading the discussions with the Chinese trade officials, Kudlow said Dec. 3. He is tasked with getting strict commitments and timetables. Trump contradicted that message 24 hours later, saying Lighthizer would be joined by Mnuchin, Commerce Secretary Wilbur Ross, and Peter Navarro, a China hawk with no practical trade or China experience.

Neither Kudlow nor Trump could guarantee anything concrete. “We’ll know pretty soon” if China and the US are actually going to get a deal, Kudlow said, while Trump tweeted Dec. 4 that he wasn’t sure whether a “real deal” was actually possible:

Some items the White House touted as big advancements are actually not a change in the status quo. China would declare fentanyl—the powerful opioid that killed the musician Prince and is a part of the US drug crisis—a “controlled substance,” the US statement issued by Trump press secretary Sarah Sanders said. Yet fentanyl-related compounds have been a controlled substance in China since 2015; a main issue is Chinese drugmakers creating new molecules that escape regulatory detection.

The history of trade negotiations between China and the US makes one thing clear: Getting China to agree to opening up its market to US beef or allowing foreign banks to do business unimpeded in the country or stopping the cyber-theft of US intellectual property can be the easy part. Actually getting Beijing to stick to these commitments, or locking the Chinese Communist Party down to a firm schedule to make these changes, has always been the difficult part.

The Trump administration, however, is celebrating after step one instead, a familiar strategy that harkens back to the Trump meeting with North Korea’s Kim Jong-un, which gave Kim new global stature without putting any restrictions on his country’s nuclear expansion.

“Odds are less than 50-50 anyone is going to be happy on the US side” when that March deadline is over, Laura Baughman, president of the Trade Partnership, a pro-trade research firm, told Quartz. The US appears to be expecting China to do a whole lot of structural reform in 90 days, she said. That’s unlikely.

Confusion and contradiction are familiar elements of Trump trade policy, she added: “It is not uncommon for officials in this administration to have different views about what was agreed to, even within the administration.”

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