Since October, Trump has been talking almost every day, wanting to meet with China, and even when the White House is facing closure, he is still talking about it. Now, well, he probably wants to pay for it. China has officially announced that it will attend the APEC Leaders’ Meeting in South Korea on October 31.
On October 23, the White House announced Trump's Asia trip: first to Malaysia, then to Japan, and finally to South Korea's Busan, where he met with South Korean President Li Keqiang.
But everyone knows that the main theme of his visit was whether he could see China in South Korea. Before negotiating, we must "make cards" first.Sure enough, just as he was about to board the plane, new chips came in again.
Trump arranged the "China-US Meeting" at the last stop during his Asian trip. I wanted to use this meeting to send a signal to the United States: I can handle diplomacy. However, China has always been very calm. Throughout October, the United States repeatedly spread rumors that it would meet, but China did not respond in a hurry. This comparison is very interesting: One side is eager to achieve results, and the other side is sitting firmly on Diaoyutai.
Trump himself was full of confidence, and he said in public: "I think we will come up with a good result and everyone will be happy." He also listed a long list of topics he wanted to talk about: rare earths, soybeans, fentanyl, the Russia-Ukraine conflict, etc. But here's the question: If you want to talk, do others have to cooperate?
On October 23rd, The New York Times broke the news that Trump was preparing to launch a new trade investigation against China on the grounds that China had not fully implemented the trade agreement signed by Trump during his first term. This investigation is based on "Article 301" and was launched on October 24 and results were sunrise on October 25. To put it bluntly, this was Trump's deliberate tough stance before the meeting.
In January 2020, China and the United States signed the first phase of the economic and trade agreement. China has committed to purchasing US$200 billion more in U.S. goods and services within two years than in 2017, including a large number of agricultural products. But later, the epidemic disrupted everything, problems occurred in the global supply chain, international food prices also fluctuated violently, and China's procurement volume failed to meet its target. It is not that the United States does not know these reasons, but they now choose to "dig up old scores."
The agreement stipulated that China would purchase US $36.5 billion in American agricultural products in 2020, but only about 60% of it was actually completed. It's not that China doesn't want to buy it, but that the epidemic has caused port congestion and transportation paralysis, and American farms themselves have also reduced production. Now Trump is bringing up the old story again, which is nothing more than an excuse to exert pressure before meeting.
In addition to investigating the new code of the trade agreement, the Trump team has also prepared several other cards. For example, restriction of key software exports to China, the phentanyl issue, the soybean issue, etc., US Trade Representative Greer said. We can no longer tolerate unfair trade with China.But are these cards really useful?
Although the United States imposed high tariffs on China, in the third quarter of this year, the Sino-US trade surplus was as high as 67 billion dollars, and the United States bought more than 1 billion dollars of goods from China every day. If the United States really sanctions Chinese software, who will suffer?
For example, the operating system in Apple phones, the design software of Intel chips, many are supported by the Chinese market.
Speaking of agricultural products, China has not bought U.S. soybeans for months in a row.The president of the U.S. Soybeans Association has publicly complained: “Our farmers have become victims of the trade war.”
In the face of Trump's various small moves, China has been very stable. The Ministry of Commerce finally responded on October 24: "China opposes'decoupling and breaking links'. The first four rounds of consultations have proved that China and the United States can find a solution." This sentence sounds ordinary, but there is a deep meaning behind it. China is reminding the United States: We talked and we worked. If you want to make trouble again, the result will not be better.
China's first confidence is rare earths. China controls 90% of the world's rare earth refining capacity. The motors of the U.S. F-35 fighter jets and the magnets of Tesla electric vehicles both rely on China's rare earths. After China tightened export controls on rare earths in early October, U.S. military companies immediately felt the pressure. Although the United States and Australia have signed a rare earth cooperation agreement, Australia's rare earth minerals must be processed using China technology, and the United States cannot circumvent China in the short term.
The second is soybeans, and China is the largest buyer of American soybeans. Trump once launched a trade war with China in 2018. As a result, U.S. soybean prices plummeted and farm bankruptcies emerged. Now that history is repeating itself, American farmers have begun writing to the White House, demanding that trade with China be resumed as soon as possible.
Trump wants a "victory" and needs to show the country: I am tough on China and I win, but China will not cooperate with him in acting. China's goal is clear: you can talk, but you cannot talk while threatening.
Trump listed the "fentanyl issue" as the focus of the talks, saying it was "the first thing to talk about". But fentanyl is America's own problem, which has only 5% of the world's population but consumes 80% of the world's opioids. Pushing the responsibility to China will not solve the social problems in the United States.
Looking back at the trade investigation, Trump thought it was a code, but in fact it could be a mess. If the survey results lead to US tariffs, China will surely counter. At that time, the cost of American companies will rise, inflation may be worse, and the average American consumer will ultimately suffer.
Trump wants to meet China with the new bargaining chip of "investigating trade agreements". But the Chinese side can see his calculation clearly. If you want to talk, you can. You want to threaten, no.
In the past four years, China and the United States have fought a trade war and a technological war.As a result, China's economic growth has not slowed down, and the technological breakthroughs of Chinese enterprises have been faster.Huawei Mate 60 mobile phones have used domestic chips, and China's electric vehicles have begun to sell to Europe and the United States.These facts show that pressure cannot break China, it will only make China stronger.
This APEC meeting, if Trump genuinely wants to talk, China will give the opportunity. but if he still plays the "coding game", China will not be kind. rare earth, soybeans, international markets - China's cards are not less than the United States.