Here’s What U.S. Businesses Want Trump to Accomplish on China Trip
President Donald Trump will arrive in China on Nov. 8 and spend two days meeting with President Xi Jinping. On the agenda are a couple of hot issues: cooperation on North Korea and the bilateral economic relationship between the United States and China.
Regarding that second topic of the economic relationship, U.S. businesses would love for Trump to gain some ground on what is perceived as a trade deficit between the two countries in favor of China. Trump is expected to be tough on trade talks with Xi, CNBC reported.
The two leaders have different objectives. Trump will seek to drive home the point that the United States will no longer tolerate imbalanced trade, while Xi will attempt to protect the status quo. The outcome of this meeting will heavily affect the trajectory of the two countries’ relations moving forward, Brookings reported.
Trump referred to his upcoming trip in a pair of recent tweets:
Melania and I look forward to being with President Xi & Madame Peng Liyuan in China in two weeks for what will hopefully be a historic trip! pic.twitter.com/uFMonzza7N
— Donald J. Trump (@realDonaldTrump) October 25, 2017
Spoke to President Xi of China to congratulate him on his extraordinary elevation. Also discussed NoKo & trade, two very important subjects!
— Donald J. Trump (@realDonaldTrump) October 25, 2017
Next: What to expect from Trump during the talks
Here’s what to expect from Trump
- Goods and services trade deficit with China: $310 billion
Trump believes the trade deficit has swung in China’s favor after previous U.S. leaders were weak to push back against the country. When meeting with Xi, Trump may bring up the forced technology transfer U.S. firms must undergo to gain entry into the Chinese market. He may also address the big issue of Chinese theft of U.S. intellectual property, as well as Chinese government-backed acquisitions of U.S. firms. These factors, and others, contribute to the imbalance in favor of the Chinese breaking into the U.S. markets, while U.S. companies struggle to start doing business in China.
“We can’t continue to allow China to rape our country, and that’s what they’re doing,” Trump said while on the campaign trail in May 2016, referring to China’s number of exports relative to the United States. “It’s the greatest theft in the history of the world.”
Next: What to expect from Xi during the talks
Here’s what to expect from Xi
- Xi became China’s president in 2013.
Xi is currently riding high after his consolidation of power at the recent 19th Communist Party Congress. In a nutshell, he consolidated his lock on the Chinese presidency for another five years. He also had his name enshrined in the national constitution – which is no small feat. And now, the worldwide attention he will receive from Trump’s visit can be used to help portray China as a powerful force domestically and globally.
Xi is expected to use his time with Trump to focus on symbolic gestures of goodwill toward the United States – which can be lacking in real substance. After all, of the two parties, the United States is the one seeking more from China than the other way around.
Next: What worries some about the upcoming meeting
Some are worried about the lack of prep work
Although the United States may be seeking immediate results and solid agreements to help balance the trade deficit, these situations are more complex and will take a longer time to negotiate, according to U.S. Commerce Secretary Wilbur Ross, who will bring a business delegation to Beijing during Trump’s visit.
A U.S. business lobbyist in China expressed concern Oct. 31 that Trump was not making adequate preparations for talks on the trade imbalances ahead of his visit. Little has been done as far as meetings between working level officials to begin negotiations on commercial issues prior to the two leaders meeting, said William Zarit, chairman of the American Chamber of Commerce in China.
Next: What are the true causes of the trade imbalance?
Xi might cite other causes of trade imbalance
- In 2015, 22% of U.S. imports came from China.
What might be giving China more leverage in the talks is the fact that it is relying less on the United States as a place to export its goods. China continues to become less dependent on exports as it focuses on growing domestically. If the United States imposes sanctions and puts stops on business dealings with China, would it only be shooting itself in the foot?
Also in question is whether Xi will argue the United States is barking up the wrong tree when assessing trade-related situations between the two countries. Rather than the causes for the deficit which the United States is citing, other possible factors responsible for the may include “automation, evolving global supply chains, and increased competitiveness of Chinese firms,” Brookings reports.
Next: China might strategically time business deals.
Trump, U.S. companies negotiating deals with China
- Approximate number of companies sending reps with Trump: 40
One aspect onlookers are anticipating is that China will likely sign some business deals with United States companies while Trump is there that could distract from the concrete issues at hand. The country has committed this practice in the past by signing deals when foreign leaders are present – deals that the country was planning on signing anyway, Brookings reported.
MSN reported that China’s state-owned oil company may partner with two U.S. companies to complete projects which would increase U.S. crude oil exports to China. These projects could help to balance the U.S. trade deficit with China.
Next: Trump seeks help with North Korea.
Leaders to discuss North Korea
- China accounts for 90% of trade with North Korea.
Other than the trade deficit talks, Trump will talk with Xi at length about how to handle North Korea and its threat of using nuclear weapons. Trump seeks China’s help in isolating North Korea further, as the country has been conducting nuclear and ballistic missile tests.
Among other things, Trump will call on Xi to fully implement U.N. Security Council resolutions against Pyongyang. China is North Korea’s sole major ally. While many other countries have no ties with North Korea, China currently accounts for 90% of trade with the country.
Trump has threatened to “totally destroy” North Korea, and he and North Korean supreme leader Kim Jong Un have called each other names in the press and on Twitter. Trump has frequently asked China to help rein in the North Korean leader.
Citing not enough time in Trump’s schedule, an administration official said Trump will not be visiting the heavily fortified demilitarized zone (DMZ) on the border of North Korea and South Korea during his trip.
Next: What will Trump and Xi do when not negotiating?
The leaders will tour historic spots in Beijing
- Number of buildings in the Forbidden City: 980
When they’re not negotiating, Xi will give Trump a private tour of the Forbidden City, located in the center of Beijing. The Forbidden City was the Chinese imperial palace during dynasties from 1420 to 1912. The leaders will also have an intimate dinner at the Zhongnanhai leadership compound.
A video shows footage of the Zhongnanhai leadership compound, which is adjacent to the Forbidden City:
Melania Trump to join Donald Trump on Asia trip
- Total length of Trump’s trip: 12 days
Trump’s entire Asian trip will last from Nov. 3 to Nov. 14 and will also include visits to Japan, South Korea, Vietnam, and the Philippines. He will be accompanied by first lady Melania Trump.
The president’s daughter, Ivanka Trump, will not travel with him to China. Instead, the president wants her to focus on tax reform. (She already hosted an event on the topic in Pennsylvania and was interviewed on the subject on a TV news show.) She will, however, travel to Japan separately to deliver a speech at a women’s empowerment conference.
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