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Can Trade Threats Be Turned to Truce? Trump Meets Xi and Merkel U.S. and China Call Truce in Trade War
(about 3 hours later)
BUENOS AIRES — President Trump neared the end of an attenuated visit to the Group of 20 summit meeting here on Saturday, sitting down with the leaders of China and Germany, two countries he has threatened with trade wars over what he calls their unfair commercial practices. BUENOS AIRES — The United States and China called a truce in their trade war on Saturday after President Trump agreed to hold off on new tariffs and President Xi Jinping pledged to increase Chinese purchases of American products. The two also set the stage for more painstaking negotiations to resolve deeply rooted differences over trade.
“We have a tremendous trade imbalance, but we’re going to get that straightened out,” Mr. Trump said before a meeting with Chancellor Angela Merkel of Germany. “We all understand each other.” The compromise, struck over a steak dinner at the Group of 20 meeting here and announced in a White House statement, was less a breakthrough than a breakdown averted. The two leaders remain far apart on basic issues of market access and trade policy, and there was no sign that either plans to back down on those.
Ms. Merkel said the two leaders would also discuss Ukraine, where a clash between Russian and Ukrainian ships last week caused tensions to flare between the two neighbors. It was cited by Mr. Trump as the reason he canceled a meeting with President Vladimir V. Putin at the meeting in Buenos Aires. Still, the handshake deal between Mr. Trump and Mr. Xi, after what the White House called a “highly successful meeting,” pauses what was becoming a headlong race toward economic conflict. It will reassure jittery financial markets, as well as American farmers, who worried about the fallout from a prolonged trade battle.
Later on Saturday, Mr. Trump began a dinner meeting with President Xi Jinping of China to discuss ways to avoid a new round of tariffs that some analysts fear could provoke a full-fledged economic Cold War between the world’s two largest economies. In a significant concession, Mr. Trump will postpone a plan to raise tariffs on $200 billion worth of Chinese goods to 25 percent, from 10 percent, on Jan. 1. The Chinese agreed to an unspecified increase in their purchases of American industrial, energy and agricultural products, which Beijing hit with retaliatory tariffs after Mr. Trump targeted everything from steel to consumer electronics.
“The relationship is very special, the relationship that I have with President Xi,” Mr. Trump told reporters, as he sat across a long table from the Chinese leader. “I think that is going to be a very primary reason why we’ll probably end up with getting something that will be good for China and good for the United States.” The countries set an ambitious deadline of 90 days to reach a broader trade agreement, with the White House warning that if they did not come to terms by then, Mr. Trump would raise the existing tariff rate to 25 percent.
“The relationship is very special — the relationship that I have with President Xi,” Mr. Trump told reporters, as he sat across a long table from the Chinese leader before dinner was served. “I think that is going to be a very primary reason why we’ll probably end up with getting something that will be good for China and good for the United States.”
Mr. Xi replied, “Only with cooperation between us can we serve the interest of world peace and prosperity.”Mr. Xi replied, “Only with cooperation between us can we serve the interest of world peace and prosperity.”
China is seeking to prevent Mr. Trump from following through on a plan to raise tariffs on $250 billion in Chinese goods to 25 percent, from 10 percent, on Jan. 1. In return, American officials said, the Chinese were likely to offer to increase their purchases of American soybeans and natural gas. As the dinner ended, the Chinese and American officials applauded the two leaders.
Neither a dramatic breakthrough nor an acrimonious breakdown was expected at the dinner. The most likely outcome, officials said, was an agreement to keep talking — a truce not unlike the one that Mr. Trump agreed to recently with the European Union. For Mr. Trump, the agreement was an upbeat end to his subdued visit to the G20 meeting. He dodged unsavory friends, smiled through chilly encounters with allies, and canceled a news conference out of respect for his predecessor, George Bush, whose death Friday was a reminder of the role that American presidents once played at these gatherings.
Mr. Trump’s single-minded focus on trade with Germany has put Ms. Merkel in an awkward spot because Germany, as a member of the European Union, cannot negotiate separately on trade issues with the United States. On his second day in Buenos Aires, Mr. Trump said little about global security or diplomacy, keeping a single-minded focus on trade. That put leaders like Chancellor Angela Merkel of Germany in an awkward position, because Germany, as a member of the European Union, cannot negotiate by itself with the United States on trade issues.
Still, Mr. Trump was a less disruptive presence at this meeting than he has been at other such gatherings. The members agreed on a 31-point communiqué that endorsed multilateral agreements like the Paris climate accord, while acknowledging the American insistence that it go its own way. “We have a tremendous trade imbalance, but we’re going to get that straightened out,” he said before meeting Ms. Merkel on Saturday morning. “We all understand each other.”
The communiqué referred to the Paris climate agreement as “irreversible” and committed its signatories to implement it fully. Underscoring U.S. isolation on the issue, the communiqué added a line referring to Washington’s announced exit from the deal. American and Chinese officials conducted quiet talks about a compromise over the last several weeks. But the outcome remained in doubt until the end, when Mr. Trump, flanked by his top aides, sat down with Mr. Xi and his aides to a meal of grilled sirloin and bottles of Malbec.
“The United States reiterates its decision to withdraw from the Paris Agreement, and affirms its strong commitment to economic growth and energy access and security, utilizing all energy sources and technologies, while protecting the environment,” the communiqué said. Mr. Trump had veered from optimism to wariness about a deal, sometimes in the course of a single statement. His economic team offered sharply conflicting advice, with moderates like Treasury Secretary Steven Mnuchin counseling compromise, while hard-liners like Peter Navarro, the White House director of trade, urged him to double down on his pressure.
The moderates tried to exclude Mr. Navarro from the trip. But at the dinner in a Buenos Aires hotel, he was there at the table, seated between the national security adviser, John R. Bolton, and the chief of staff, John Kelly. He leaned forward to listen to the president as he urged Mr. Xi to crack down on illicit shipments of the deadly opioid, fentanyl.
The White House said that Mr. Xi, in a “humanitarian gesture,” had agreed to designate fentanyl as a controlled substance.
Some experts said the forces Mr. Trump had set in motion with Beijing would be hard to restrain. The United States is demanding sweeping changes in China’s trade policy, which the Communist government might find politically difficult to enact and impossible to enforce.
And the 90-day deadline is exceptionally ambitious for a trade agreement that has eluded negotiators for nearly two years.
“A halt in the tariff wars will be welcome but won’t alter the fundamental collision course that Trump and Xi seem to be on,” said Daniel M. Price, a former trade adviser to President George W. Bush.
The White House, he said, continued to tighten export controls and to bar Chinese high-technology firms like Huawei from American infrastructure projects. It is also lining up other countries to clamp down on the forced transfer of technology to China — all steps that will provoke Beijing.
Still, Mr. Trump was a less disruptive presence at this gathering than he has been at previous ones. The G20 members agreed on a 31-point communiqué that reaffirmed their commitment to the Paris climate accord, even as the United States reiterated its decision to pull out of it.
“All countries except the U.S. backed conclusions reaffirming the Paris Agreement and its full implementation,” Laurence Tubiana, the former French climate negotiator and now head of the European Climate Foundation, said in a statement.“All countries except the U.S. backed conclusions reaffirming the Paris Agreement and its full implementation,” Laurence Tubiana, the former French climate negotiator and now head of the European Climate Foundation, said in a statement.
The statement also expressed concern about the World Trade Organization, a favorite target of Mr. Trump because he believes it crimps America’s ability to use tariffs and allows countries like China to cheat. The statement also expressed concern that concern that the World Trade Organization should be reformed. The W.T.O. is a favorite target of Mr. Trump because he believes it crimps America’s ability to use tariffs and allows countries like China to cheat.
“The system is currently falling short of its objectives, and there is room for improvement,” the communiqué said, in a phrase that an administration official described as a victory for Mr. Trump. “The system is currently falling short of its objectives and there is room for
The statement also did not include a reference to the dangers of protectionism, which American officials said could have held it up. Two weeks ago, a feud over language on trade between China and the United States stymied the drafting of a communiqué after an economic summit in Papua New Guinea — and it was never issued. improvement,” the communiqué said, in a phrase that an administration official described as a victory for Mr. Trump.
Mr. Trump said he canceled a news conference planned for Saturday afternoon out of deference to the family of President George Bush, who died a day earlier in Houston. The statement did not include a reference to the dangers of protectionism, which American officials said could have held it up. Two weeks ago, a feud over language on trade erupted between China and the United States stymied the drafting of a communiqué after an economic summit in Papua New Guinea — and it was never issued.
“The fact that we lost a president who truly was a wonderful person, a wonderful man, a great man — it really puts a damper on it, to be honest with you,” Mr. Trump said. By contrast, this meeting was relatively harmonious, with Mr. Bush’s death eliciting expressions of condolence from Ms. Merkel and Mr. Xi, who praised his role in advancing American-Chinese relations. In 1974 and 1975, Mr. Bush headed the United States liaison office to the People’s Republic of China, a forerunner of the American Embassy.
He turned to Ms. Merkel and asked her to share a recollection of a visit she made to the White House with then-Chancellor Helmut Kohl, when Mr. Bush was president. She referred to him as “one of the fathers of the German unification,” and said, “we will never forget that.” By canceling his news conference, Mr. Trump avoided a platform where his freewheeling and provocative remarks could have emphasized differences with allies and adversaries alike. Instead, he struck a somber tone, praising Mr. Bush and his legacy in all his meetings.
Even before Mr. Bush’s death, the meeting was shadowed by Mr. Trump’s legal troubles back home — his former personal lawyer, Michael D. Cohen, pleaded guilty to lying to Congress about his dealings with Russia on behalf of Mr. Trump — and by his truncated schedule while in Buenos Aires. “The fact that we lost a president who truly was a wonderful person, a wonderful man, a great man — it really puts a damper on it, to be honest with you,” Mr. Trump said, as he sat next to Ms. Merkel.
This was the kind of diplomatic conclave at which Mr. Bush, a globe-trotting foreign-policy president, would have thrived. Mr. Trump’s less comfortable experience here attested to how the American role in the world has changed during the Trump presidency. He invited the chancellor to share a recollection of a visit she made to the White House with then-Chancellor Helmut Kohl, when Mr. Bush was still president. She referred to him as “one of the fathers of the German unification,” adding, “we will never forget that.”
Mr. Trump also skipped a meeting with Crown Prince Mohammed bin Salman of Saudi Arabia, another strongman whom he has drawn close but who has fallen into disrepute. The C.I.A. has concluded the crown prince played a role in the killing of the Saudi dissident Jamal Khashoggi in the Saudi Consulate in Istanbul in October. Even before Mr. Bush’s death, the meeting was shadowed by Mr. Trump’s legal troubles back home — his former personal lawyer, Michael D. Cohen, pleaded guilty to lying to Congress about his dealings with Russia on behalf of Mr. Trump — and by his truncated schedule in Buenos Aires.
Mr. Trump’s stubborn defense of Prince Mohammed has caused tensions with Turkey, which has shared an audio recording of the attack on Mr. Khashoggi with American officials and demanded a fuller accounting from the Saudis of what happened. This was the kind of diplomatic conclave at which Mr. Bush, a globe-trotting foreign-policy president, would have thrived. But Mr. Trump’s experience was less comfortable.
He skipped meetings with President Vladimir V. Putin of Russia and Crown Prince Mohammed bin Salman of Saudi Arabia, two strongmen he has drawn close but who have fallen into disrepute.
Mr. Putin has come under criticism for a clash last week between Russian and Ukrainian naval vessels, while the C.I.A. concluded that Prince Mohammed played a role in the killing of the Saudi dissident Jamal Khashoggi in the Saudi Consulate in Istanbul in October.
Mr. Trump’s stubborn defense of Prince Mohammed has aggravated tensions with Turkey, which shared an audio recording of the attack on Mr. Khashoggi with the director of the C.I.A., Gina Haspel, and demanded a fuller accounting from the Saudis of what happened.
On Saturday, Mr. Trump met with Turkey’s leader, Recep Tayyip Erdogan, but the White House closed the session to even the brief picture-taking opportunity that usually accompanies these meetings.On Saturday, Mr. Trump met with Turkey’s leader, Recep Tayyip Erdogan, but the White House closed the session to even the brief picture-taking opportunity that usually accompanies these meetings.
At a dinner for the leaders on Friday night, the White House said Mr. Trump spoke informally with Mr. Putin. There were photos of the president and first lady Melania Trump seated at the long table, separated from Mr. Putin by Mr. Xi and his wife, Peng Liyuan.At a dinner for the leaders on Friday night, the White House said Mr. Trump spoke informally with Mr. Putin. There were photos of the president and first lady Melania Trump seated at the long table, separated from Mr. Putin by Mr. Xi and his wife, Peng Liyuan.