Trumps’ optimism on China deal hides deepening rift

President Donald Trump has hailed "tremendous progress" in US-China trade negotiations while Chinese leader Xi Jinping says their relations are at a "critical" stage, with one month left to settle their tariff dispute.

U.S. Trade Representative Robert Lighthizer (2nd right) sits across from China's Vice Premier Liu He (left) during the opening of US-China Trade Talks Reuters

The Chinese delegation led by Vice Premier Liu He was in Washington for the complex talks on resolving a trade war between the world's two biggest economies. But even if the war comes to an end, a larger schism is looming.

Washington has set a deadline of 1 March for China to agree to deep reforms ending what the White House says are unfair trade practices, including protectionism and systematic intellectual property theft.

"You will be going early February with your group to China," Trump said in the White House to negotiators after they spent a second day of talks with Chinese counterparts.

In a letter from to Trump that was read out by the Chinese delegation, Xi said relations were at a "critical" stage and that he hoped "our two sides will continue to work with mutual respect".

Trump said relations between the two countries are "very, very good."

Smokescreen

But his optimism is not shared by everybody and if there is no deal, tariffs already imposed on $200 billion in Chinese imports will rise from the current 10 percent to 25 percent.

US trade negotiator Robert Lighthizer said that although there had been "progress ... we have much work to do".

Others say Trump is just creating a smokescreen. “From what we know, it would appear that the two chief negotiators on the part of the US and of China did not manage to get any kind of breakthrough,” says Steve Tsang, head China Studies with the School of Oriental and African Studies (SOAS) in London.

“There is no basis of an agreement. And then you have president Trump saying that if he meets President Xi Jinping, his “friend,” then there will be a comprehensive and full trade agreement with China.

“This is pretty extraordinary. It does not normally happen in diplomacy,” he says.

According to Tsang, Trump is in dire need of political success, now that plans for his wall along the border with Mexico are in jeopardy.

Needing a spectacular win

“Donald Trump is much more interested in Donald Trump’s political interests...not in the American national interest. He seems defeated – fairly spectacularly – over the funding for the wall.

"Donald Trump probably feels that he needs a spectacular win. And therefore thought that he might try to secure a symbolic win with China."

By acting as he does, Trump is “putting the cart before the horse", says Tsang. "We are talking about a situation where Trump will have to actually negotiate with Xi in order to get an agreement. I don’t think there is going to be a real agreement, but Trump will declare victory and say he has an agreement."

But even if there is an agreement of sorts, it won’t hide the deeper, more complex problems.

Threat assessment

Just two days ago, Daniel Coats, the Director of National Intelligence, gave his yearly Worldwide Threat Assessment at the Senate Select Committee of Intelligence: “We currently face the most complex, volatile and challenging threat environment in modern times," he said.

According to Coats, the risk of inter-state conflict is “higher than any time since the end of the Cold War” and the US has entered a period that can “best be described as a race for technological superiority against our adversaries” who he says seek to “sow division in the States and weaken US leadership.”

One Belt, One Road

Symbolic for the increasing US worries that it may be losing its technological edge is the ongoing spat with telecom giant Huawei, that Washington accuses of having stolen technology from T-mobile.

Currently, Huawei’s Chief Financial Officer, Meng Wanzhou, is under detention in Canada, awaiting possible extradition to the US where the company is accused of technology theft and supplying Iran with technology forbidden under the pre-2015 sanctions regime.

Washington fears China will be more and more successful in chipping away US global influence using trade and technological know-how to extend its presence worldwide.

“China will increasingly seek to extend its regional influence,” warns Coats, “and shape events and outcomes globally. It will take a firm stance at its regional claims and intends to use its One Belt, One Road initiative to increase its reach to geo-strategic locations across Eurasia, Africa and the Pacific.”