US-China Trade Talks Collapse and It’s North Korea’s Fault

The United States and China met to discuss trade issues. The meeting ended without agreement on anything. The obligatory joint press conference after the talks, where everyone pretends that everything was fine, was canceled. The only comment came from a U. S. official who said there were frank discussions, which means that the talks were tough and full of threats.
At the beginning of Donald Trump’s presidency, GPF expected that these kinds of confrontations would take place. But both countries put aside their disagreements to deal with another overriding issue: North Korea’s nuclear program. The issue emerged shortly after Trump’s inauguration, when it became apparent that North Korea was moving aggressively to develop a nuclear delivery capability. After analyzing the military reality, the United States was reluctant to launch a strike against North Korea and instead pursued negotiations.
During Chinese President Xi Jinping’s visit to the United States in April, discussions between Xi and Trump turned from trade and related policies to the question of North Korea. Over the years, the United States had relied on the Chinese to act as an intermediary and restrain North Korea. Trump asked Xi to play that role again, offering to reward China for its cooperation by softening the U. S. negotiating position on trade. We know that this happened because of various leaks, because of the lack of further confrontation over trade and because Trump tweeted that China’s help on North Korea would lead to a better deal for China.

This post was published at Mauldin Economics on JULY 24, 2017.