Trump and Xi size each other up at the Florida summit
No surprises and little substance at the first meeting of US and Chinese leaders
TSUYOSHI NAGASAWA and OKI NAGAI, Nikkei staff writers
PALM BEACH, U.S. At their first summit, U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to draw up a 100-day plan to address the bilateral trade imbalance and enhance cooperation on North Korea.
The meeting, held April 6 and 7 at Trump's Mar-a-Lago resort in Florida, was aimed at showing the world that the two superpowers are collaborating, but the two sides put off drafting concrete measures to address the big issues that trouble their relationship. The summit ended without a joint statement, although Trump accepted Xi's invitation to visit China this year.
"We have made tremendous progress in our relationship with China ... and I believe lots of very potentially bad problems will be going away," Trump said after the summit. Xi also spoke in positive terms, "We have engaged in deeper understanding and have built a trust."
Asked about tangible achievements, Commerce Secretary Wilbur Ross, who was present at the summit, singled out the 100-day plan. He said the plan will help increase American exports to China and reduce the U.S. trade deficit. Details will come later.
DEAL ME IN Trump and Xi also decided to create a framework for dialogue in four areas, including foreign affairs and security, and the economy. Ross and Treasury Secretary Steven Mnuchin held talks with Chinese Vice Premier Wang Yang on April 7 and agreed that within 100 days, the two countries will analyze the bilateral trade imbalance and come up with measures to close the gap. The U.S. wants to expand exports of aircraft, energy and farm products to China.
Reducing the trade deficit with China is Trump's top priority, as it was one of his big election pledges. The U.S. merchandise trade deficit came in at $734.3 billion in 2016, with China accounting for 47% of the total. On the other hand, China is a major holder of U.S. government bonds. China is also an important market for U.S. companies. One Republican insider said that in contrast to Trump's fiery rhetoric, the Treasury and Commerce departments are calling for a softer stance toward Beijing.
Trump repeatedly told Xi that China's export subsidies and excess steel production are hurting American manufacturers. China's state-run Xinhua News Agency quoted Xi as saying that China's domestic demand has been expanding continuously, and that the future of China-U.S. economic and trade cooperation is bright. The remarks may hint at more Chinese imports of U.S. goods. Xi also invited Washington to take part in China's Belt and Road Initiative, a huge infrastructure project aimed at forming stronger economic links across Eurasia.
So far, however, the pledges of cooperation are short on substance.
Trump urged Xi to press North Korea to end its nuclear and missile development programs. Washington suspects Pyongyang may soon come up with a ballistic missile capable of hitting the U.S. mainland. Xi agreed to work more closely with the U.S., but remained cautious. Washington looks ready to step up the pressure on China, but the two superpowers are likely to continue jockeying for position.
Trump asked that China take a more proactive stance with Pyongyang, warning Xi he is prepared act alone if China does not help bring North Korea to heel. The U.S. Navy launched cruise missiles at a Syrian air base while Trump and his guest were having dinner on April 6. The message that the U.S. could consider military action against North Korea will not have been lost on Xi.
ENDURING DIFFERENCES The two leaders agreed that North Korea's nuclear advances had reached a "very serious stage," and China promised to work more closely with the U.S. to denuclearize the Korean Peninsula. But China has not changed its basic policy toward Pyongyang.
Chinese leaders are worried that instability in North Korea could send refugees flooding across the border, and precipitous action by the U.S. would badly strain ties between Beijing and Washington. The Chinese leadership does not want any diplomatic spats to disrupt the Communist Party Congress scheduled for the fall.
North Korea will no doubt continue to push ahead its nuclear and missile development while the two superpowers engage in their tug of war. A diplomatic source, speaking on condition of anonymity, said the situation has become even more serious because the top agenda item -- North Korea -- went unresolved at the summit.
Turning south, Trump spoke of the importance of abiding by international norms in the South and East China seas, where China is stepping up its naval activity. He quoted Xi's past remark that China would not militarize the South China Sea and urged him to keep his word. He also touched on human rights. The Chinese side had its own priorities, calling on the new U.S. president to maintain the "One China" policy of his predecessors.
The two countries agreed to consider creating a framework for dialogue between their military Joint Chiefs of Staff to prevent accidental clashes and build trust.
After the talks, Trump and Xi strolled around the resort, accompanied only by interpreters. Trump gesticulated as he spoke, while Xi nodded politely. The walk lasted just three minutes, but the men shook hands in front of the media to highlight the friendly atmosphere.
It remains unclear how much of this was for show and how much reflected budding trust between the two. The U.S. missile strikes in Syria probably caught Xi off guard. Trump reportedly informed his counterpart about the strikes shortly before their banquet ended.
Washington has stepped up the pressure on China since the summit. U.S. broadcaster NBC News reported on April 7 that Trump's National Security Council has proposed redeploying nuclear weapons with U.S. forces in South Korea as part of a review of North Korea policy.
With little time for preparation and many of the Trump administration's key foreign policy posts still vacant, the two sides were unable to discuss matters in detail. Still, they had ample reason to hold the summit.
ON THE HOME FRONT Trump was recently forced to give up on a bill to repeal "Obamacare," the health care reforms of his predecessor, Barack Obama. The bill was headed for defeat in House of Representatives due to a revolt among Republicans. Trump's approval rate has been falling. In an effort to regain lost ground, the president signed an executive order on March 31 aimed at reducing the U.S. trade deficit. He needed to score as many points as possible at the summit with the leader of the country that is the single biggest source of red ink.
For his part, Xi's top diplomatic priority is stable relations with Washington. Since joining the World Trade Organization in 2001, China's economy has expanded by riding the wave of globalization spearheaded by the U.S. But with the economy now losing steam, China will have trouble earning foreign currency if the Trump administration turns hostile. If that happens, China would have to reconsider its strategy of using its financial muscle to raise its international profile.
The summit was held on Trump's private property, not in Washington. Freed from the political constraints of a White House affair, Trump and Xi may have found it easier to open up and agree to keep talking.
Nikkei staff writer Takeshi Kawanami and Nikkei senior staff writer Kazuki Kagaya contributed to this report.