The Truth About Trump's 'Incredible' Trade Deal With China - Rolling Stone
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The Truth About Trump’s ‘Incredible’ Trade Deal With China

Donald Trump and Xi Jinping met for dinner in Argentina to discuss trade, but only agreed to a temporary truce

President Donald Trump with China's President Xi Jinping during their bilateral meeting at the G20 SummitPresident Donald Trump with China's President Xi Jinping during their bilateral meeting at the G20 Summit

President Donald Trump with China's President Xi Jinping during their bilateral meeting at the G20 Summit, in Buenos Aires, Argentina on Dec. 1, 2018.

Pablo Martinez Monsivais/AP/REX/

President Trump was confident he would be able to work out a trade deal with Chinese President Xi as they dined in Argentina over the weekend. The two world leaders appear to have agreed to something geared toward ending the trade war between the U.S. and China. It’s unclear what exactly that something is, though, as both sides have presented notably different versions of what was discussed Saturday night over grilled sirloin and Malbec. It’s at least a safe bet that it’s not as groundbreaking as Trump wants Americans to believe Monday morning.

Trump’s use of the phrase “BIG leap forward” to characterize his progress on trade with China was unfortunate. The “Great Leap Forward,” as many were quick to point out, was a mid-century campaign by China’s Communist Party that led to economic regression, the Great Chinese Famine and the tens of millions of deaths. It’s hard to say whether Trump had simply never heard of the Great Leap Forward and the use of the phrase was a coincidence, or if he had some foggy recollection that “leap forward” was connected to something in Chinese history and figured it clever to use similar language to describe whatever resulted from his dinner with Xi.

No one is quite sure what kind of agreement the two reached outside of to pause, for now, what has become a rapidly escalating trade war. Trump has already placed tariffs on $250 billion in goods imported from China, to which China has retaliated with tariffs on American imports. In September, Trump promised to raise the tariffs on $200 billion of those goods from 10 percent to 25 percent (the other $50 billion in goods are already taxed at 25 percent), and to slap new tariffs on an additional $267 billion in goods, if the two nations couldn’t reach a new deal by January 1st. In Argentina, Trump agreed to hold off imposing these new tariffs for 90 days as the two nations continue to work toward a resolution. “It’s an incredible deal,” Trump said on Air Force One after the dinner. “It goes down, certainly, if it happens, it goes down as one of the largest deals ever made.”

As part of the temporary truce, China has agreed to buy an unknown amount of American goods, including farming products, and to classify fentanyl as a controlled substance. “Very importantly, President Xi, in a wonderful humanitarian gesture, has agreed to designate Fentanyl as a Controlled Substance, meaning that people selling Fentanyl to the United States will be subject to China’s maximum penalty under the law,” White House Press Secretary Sarah Huckabee Sanders said in a statement.

The problem with all of this is that there doesn’t seem to be any indication that an actual deal to end the trade war has any better chance of coming together in the next 90 days than it has over the past year of stalled talks. On Sunday night, Trump tweeted what on the surface seemed to be a concrete sign of progress. “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%,” he wrote. This isn’t really that significant, though. For one, American imports make up only about one percent of the Chinese auto market, according to the New York Times, totaling just over $10 billion. The current tariff of 40 percent is also part of the retaliatory tariffs China has imposed in response to Trump’s tariffs on Chinese imports.

It’s also possible that China did not even agree to this. As Times reporter Glenn Thrush points out on Twitter, Peter Navarro, the director of the White House National Trade Council, refused to confirm China cut auto tariffs while speaking with NPR. He only acknowledged that the issue “certainly came up” as Trump and Xi dined in Argentina. China made no mention of cutting auto tariffs in describing the nature of the agreement between Xi and Trump, meaning it’s possible — if not likely — that Trump is lying.

Not only did China not mention any relief of their retaliatory auto tariffs, they didn’t mention the 90-day window (only that additional tariffs wouldn’t be imposed on January 1st); that they would buy a “significant” amount of farming products (only that they will import more goods from America); or that, as Trump claimed, President Xi will now reconsider approving a merger between Qualcomm and NXP Semiconductors, which he scuttled this summer as the trade war intensified. (The list of discrepancies in the terms of the agreement made in Argentina doesn’t end there, as Bloomberg pointed out in a chart.)

Regardless of the specifics outlined by the United States and China, the agreement that came out of the dinner between Trump and Xi in Argentina amounts to little more than a delay. Most experts have cast doubt that China is going to suddenly cow to Trump’s big-picture trade demands. “We put off tariffs for 90 days in exchange for the same things we’ve been negotiating with the Chinese with for over a year,” Derek Scissors, a China specialist at the American Enterprise Institute, told the Times. “Why would this 90 days make any difference?”

For those worried that the trade war may extend well beyond the first few months of 2019, fear not. Treasury Secretary Steve Mnuchin appeared on CNBC Monday morning to assure Americans that history’s greatest dealmaker will be the one spearheading talks going forward. “It’s clear that President Trump is going to be the one who leads the negotiations,” he said.

In This Article: Donald Trump


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