WASHINGTON (AP) — The calm following the September 19 phone call between U.S. President Donald Trump and Chinese President Xi Jinping had barely ended when strong undercurrents surged, threatening to rock the entire ship.
First, the U.S. government widened sanction rules on Chinese companies. Beijing retaliated by expanding permitting requirements on rare earth materials needed in everything from smartphones to fighter jets. Trump hit back with threats to impose an additional 100% tariff on Chinese goods, clouding any prospect for a trade deal ahead of a possible summit in South Korea between Trump and Xi on the sidelines of the Asia Pacific Economic Cooperation summit later this month.
“I threaten them with something I think is much more powerful. That’s tariffs,” Trump said. “I could also threaten them with many other things, like airplanes,” suggesting that the U.S. could stop sending China airplane parts.
For its part, Beijing declared its resolution to counter any U.S. move. “Willful threats of high tariffs are not the right way to get along with China,” a Chinese commerce ministry spokesperson stated. “China’s position on the trade war is consistent: we do not want it, but we are not afraid of it.”
Such is the game between the world’s two largest economies, with both sides seeking an upper hand in the closely watched trade negotiations.
Leverage is the key tool for Trump and Xi. “I think both sides have tried to deploy lots of leverage ... to the advantage of their negotiating position,” said Nick Burns, the former U.S. ambassador to China. Both sides are learning to weaponize their interdependence, creating a kind of equilibrium. While the United States can impose economic costs, China has greater pain tolerance.
China has flexed its muscles with soybeans, its dominance in processing rare earth elements, and various countermeasures. Conversely, the U.S. boasts advanced technologies in computing chips and jet engines.
Beijing appears to be going on offense with expanded rules for rare earth products, a move seen as an attempt to establish terms in the bilateral dynamic. As one expert points out, the U.S. seems caught off guard by China's dynamic strategies, leading to a metaphor of chess versus tic-tac-toe.
Ultimately, any potential agreement may not heavily favor the U.S. as both nations navigate complex negotiations, suggesting that a compromise may emerge with elements of satisfaction for both parties.
First, the U.S. government widened sanction rules on Chinese companies. Beijing retaliated by expanding permitting requirements on rare earth materials needed in everything from smartphones to fighter jets. Trump hit back with threats to impose an additional 100% tariff on Chinese goods, clouding any prospect for a trade deal ahead of a possible summit in South Korea between Trump and Xi on the sidelines of the Asia Pacific Economic Cooperation summit later this month.
“I threaten them with something I think is much more powerful. That’s tariffs,” Trump said. “I could also threaten them with many other things, like airplanes,” suggesting that the U.S. could stop sending China airplane parts.
For its part, Beijing declared its resolution to counter any U.S. move. “Willful threats of high tariffs are not the right way to get along with China,” a Chinese commerce ministry spokesperson stated. “China’s position on the trade war is consistent: we do not want it, but we are not afraid of it.”
Such is the game between the world’s two largest economies, with both sides seeking an upper hand in the closely watched trade negotiations.
Leverage is the key tool for Trump and Xi. “I think both sides have tried to deploy lots of leverage ... to the advantage of their negotiating position,” said Nick Burns, the former U.S. ambassador to China. Both sides are learning to weaponize their interdependence, creating a kind of equilibrium. While the United States can impose economic costs, China has greater pain tolerance.
China has flexed its muscles with soybeans, its dominance in processing rare earth elements, and various countermeasures. Conversely, the U.S. boasts advanced technologies in computing chips and jet engines.
Beijing appears to be going on offense with expanded rules for rare earth products, a move seen as an attempt to establish terms in the bilateral dynamic. As one expert points out, the U.S. seems caught off guard by China's dynamic strategies, leading to a metaphor of chess versus tic-tac-toe.
Ultimately, any potential agreement may not heavily favor the U.S. as both nations navigate complex negotiations, suggesting that a compromise may emerge with elements of satisfaction for both parties.
