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To Xi or not to Xi: Will he meet with Trump at the G-20?

Jun 13, 2019

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  • President Xi Jinping is expected to meet with President Trump at the G-20 summit later this month, but will he?
  • China’s foreign ministry has yet to confirm a meeting with Trump, something that is not necessarily out of the ordinary; they often confirm last minute
  • What’s clear, though, is that President Xi is in a tough spot on what to do next:  negotiate with Trump and potentially appear weak at home OR maintain a tough stance, refuse to accept US demands and feed the growing nationalism at home while appeasing the hardliners
  • Trump has said meet me, or else…

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It was you! China publishes white paper, pointing finger at US for causing trade tension

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  • Xi could stand firm and refuse to accede to Trump’s demands and accept additional tariffs
    • China may see early 2020 US presidential polls that show President Trump trailing a number of Democratic candidates
    • China could just wait and take its chances on facing a new president
    • With the situation in Hong Kong deteriorating this week with 1 million protesters on the streets on Sunday, this is a direct challenge to Xi’s efforts to bring Hong Kong closer to the mainland
    • Standing up to the US at this point may aid in deflecting from the ugly scenes in Hong Kong that don’t exactly convey strength for Beijing
  • Conversely, Xi could meet with Trump, try to dial down tensions and seek concessions from the US on some of its demands
    • President Trump made clear that he wants China to accept the deal that was made a month ago and that he will accept nothing less
    • Xi faces a slowing economy and tariffs on $300 billion of additional exports to the US would have a crippling effect
    • Manufacturers can move production out of China much easier than just 10 years ago and China understands this
    • Increase stimulus spending is softening the blow for now, but that has its limits
  • The last time President Trump and President Xi met at the G-20 in Argentina, the two agreed to a 90-day truce which allowed for additional negotiations
  • Negotiations collapsed a little over a month ago and tensions have risen since
  • Late in the day White House Economic Adviser Larry Kudlow said President Trump is still waiting for an answer about his meeting with President Xi Jinping

 

 

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