Perhaps nobody was more surprised to hear that China had called President Donald Trump’s administration to restart trade talks than the government in Beijing itself.
After a weekend of confusing signals, Trump’s credibility has become a key obstacle for China to reach a lasting deal with the US, according to Chinese officials familiar with the talks who asked not to be identified. Only a few negotiators in Beijing see a deal as actually possible ahead of the 2020 US election, they said, in part because it’s dangerous for any official to advise President Xi Jinping to sign a deal that Trump may eventually break.
In off-the-cuff remarks to reporters at the Group of Seven summit in France on Monday, Trump claimed that Chinese officials called “our top trade people” and said “let’s get back to the table.” In subsequent appearances he portrayed the outreach as evidence China was desperate to make a deal: “They’ve been hurt very badly, but they understand this is the right thing to do.”
It all made for splashy headlines and momentarily boosted stocks, but nobody in Beijing officialdom appeared to know what he was talking about. Even worse, his efforts to depict China as caving in negotiations actually confirmed some of their worst fears about Trump: that he can’t be trusted to cut a deal.has further enlarged the distrust,” said Tao Dong, vice chairman for Greater China at Credit Suisse Private Banking in Hong Kong. “This makes a quick resolution nearly impossible.”
Two Chinese officials likened the country’s approach to the US during the Korean War, saying it consisted of fighting while talking, and using fights to speed up talks. China has prepared contingency plans in case of a no-deal scenario, three officials said, including putting US companies on its unreliable entity list and stimulating the economy.
China’s foreign ministry on Tuesday again said it was unaware of the phone calls mentioned by Trump, reiterating a statement immediately after his remarks. One of the first to call out Trump was Hu Xijin, chief editor at the Communist Party-backed Global Times newspaper, who said Monday that the US president was exaggerating the significance of low-level talks and China’s position hadn’t changed.
