Last month, analysts commented that Trump had Xi in a box. He either had to meet Trump at the G20 or Trump would escalate tariffs.
Allegedly, this was a win for Trump and a defeat for Xi.
Not quite. Today Xi turned the tables.
China Sets Preconditions
The Wall Street Journal reports China to Insist U.S. Lift Huawei Ban as Part of Trade Deal.
Among the preconditions for a trade agreement, Chinese officials with knowledge of the plan said, Beijing is insisting the U.S. remove its ban on the sale of U.S. technology to Chinese telecommunications giant Huawei Technologies Co. Beijing also wants the U.S. to lift all punitive tariffs and drop efforts to get China to buy even more U.S. exports than Beijing said it would when the two leaders last met in December.
The U.S. chief trade negotiator, Robert Lighthizer, and his Chinese counterpart, Liu He, talked by telephone this week on ways to get the talks back on track and expect to meet in person in advance of the presidents’ Saturday lunch meeting after a Group of 20 summit in Osaka, people familiar with the discussions said. It is far from clear what the two will manage—and whether their bosses will approve their work.
Face-Saving Maneuver
This maneuver allows Xi to appears as if he is not bowing down to Trump.
And he isn’t, or at least hasn’t.
No Preconditions?!
CNBC reports Larry Kudlow: There are no preconditions for the China trade talks
It is not for the US to say whether or not China has preconditions.
Fox News Interview
Larry Kudlow discusses preconditions with Fox News.
Kudlow’s gambit on Fox news was to say “There are no preconditions for Xi meeting Trump,” but that is not what headline reports state.
Sandra at Fox interrupted …
“Not to nitpick Larry, but words are so important. Words can move markets.”
I expected Sandra to point out the difference between preconditions on meeting Trump and preconditions on a trade deal. Those are two different things.
However, she let Kudlow off the hook.
Perfect Happiness
Kudlow managed to switch the subject to “happiness”.
“Trump is perfectly happy where we are,” said Kudlow.
What can be better than perfect? By definition, it cannot be improved on.
I suggest that it is more than a bit silly to seek changes if you are “perfectly happy” as is.
Fake News
Speaking of the Wall Street Journal report, Kudlow said “I don’t know where those stories comer from, but it is fake news“.
US Preconditions
Curiously, Kudlow went on to name US preconditions!
“We insist and will continue to insist, structural changes on intellectual property, and forced transfer of technology ..“
Sandra Interrupted. Stop.
I expected her to ask: How can there be no preconditions if the US has them? But once again she blew it.
Her interruption was to ask a lame question about interest rates.
Are There Preconditions?
- Yes, by China
- Yes, by the US. Kudlow names them.
- But in general, no, there are none.
Hopefully, this is clear.
Mike “Mish” Shedlock
How can you tell they didn’t steal 5G?
#1 is key
And how do you know that their 5G is secure and without back doors or other issues?
It seems like a great way to enable them to steal IP and get further into the data networks.
No one is saying that they have not stolen IP. Therefore, it’s a pretty good guess that they plan to continue to do so.
Thanks KidHorn – Typo fixed.
Xi and Trump will decide only 1 thing: whether there are more talks
Unfortunately, everyone is focused on the wrong issue. The issue isn’t trade rules or tariffs. The issue is the CCP and its communist mercantilism. The US government does not decide that China should become a “leader” an entire sector of the technology world and then create a company or series of companies to accomplish it; provide it with all the unlimited funding it needs; select and appoint former military or scientists to run it; and then go form partnership with American or European companies where “voluntary” transfer of technology is required; or, failing that in terms of access and time, have their cyber experts (and the military controls thousands of them) penetrate a set of target companies in the US to obtain whatever they need in terms of technological data. Another way to do it is to have their overseas Chinese who are working at tech labs or tech companies in the US just steal it.
Then soon after, China becomes a “leading country in the development of XYZ technology”. That’s the way it is done.
Remember, the Chinese “Constitution” requires all Chinese and Chinese companies to work for or spy for the CCP when requested. How do you say “no” to a Communist dictatorship that has all power?
Irondoor,
Of course you are right. But that won’t be changed. The USA can choose to throw tariffs on their products, but other countries won’t. And that will give those other countries a competitive advantage against the USA. Chinese capitalism has certain advantages at this stage in its development. They’re manufacturing state of the art 5G equipment while we are building apps to call taxis. Either we adapt and change, or we lose. And we are losing right now. Tariffs are a 19th century solution to a 21st century problem.
Typo in the title. Extra ‘are’.
I don’t see how Trump and Xi can come to an agreement without a group of US economists meeting with a group of Chinese economists first. The economists would have to sign off. I doubt Trump or Xi even know what a good deal would entail.
Agree with stillCJ on one key point: China is stealing technology, and not just from the US.
But… What is the solution? Tariffs clearly do not work.
If businesses insist on doing business in China knowing full well that China steals, it is Trump’s problem to fix?
When it comes to 5G, China got ahead, and not by stealing from the US
How can you tell they didn’t steal 5G ?
And regarding Huawei, I know of cases where they have spies and of cases where they hacked into other companies to steal IP. And they are half owned by the Chinese government.
Can you enumerate the cases where Huawei has hacked companies please? Claiming to know something is different from and a lot less persuasive than pointing to documented examples.
Here is some of the evidence for your perusal. One of those was my former employer. link to aragonresearch.com
More here..
Tariffs do work and are working. Xi is gambling with his life. President Trump is playing for all the marbles. The Chinese economy is on the verge of famine, banking collapse, and massive unemployment. Capital flight is underway because the Chinese bureaucrats know the score. 50% tariffs will push China over the edge. When 1.5 billion hungry people riot the “emperor for life” finds his head on a stick.
Tariffs alone won’t do the trick, but sitting on your hand is no solution, either. The Chinese obviously put all effort into 5G, while they copy-catted 4G, and undersold their competitors who were thus teetering on the verge of bankruptcy. Thus came the M&A wave: Alcatel/Lucent, then Nokia. Nobody said M&A contribute to stability, and bursts of innovation, but Wall Street and CEOs came out OK. The corn seed had been eaten.
I didn’t know that. I assumed ISIS was started by the USA with the dearly departed McCain as its chief advocated along with the Saudi’s . I understood they killed both Muslims and Christians. I also have read the Iranian citizens are pro western and for the most part do not espouse extremist ideology like their leaders.
He non stop trashes the US tired of it
The art of lying!
It is understandable China wants to keep on stealing US technology, that has been a huge factor in their catching up to the US both economically and militarily. Trump is absolutely correct to force China to quit that.