Two Heads of State Haggle Over Who Gets to Rule the Trade

A weapons sale to Taiwan worth $14bn got frozen in May because the president of the United States called it "a very good negotiating chip." That's the phrase. A chip. On a table where two states play poker with an island's defense and with the livelihoods of everyone downstream of a tariff schedule.

Next week US President Donald Trump travels to Shenzhen for the Asia-Pacific Economic Cooperation summit, held Nov 18 and 19, where he's due to meet Chinese President Xi Jinping on the sidelines. It's their third encounter this year. A fragile trade truce between the world's two largest economies runs only until Jan 10. Disputes over tariffs, agricultural purchases and technology remain unresolved. On Monday, China's Customs Tariff Commission said it would keep an additional 24 per cent tariff on US goods suspended for another two months, while retaining a 10 per cent levy.

Who Has the Power

The people who will decide all this are two men in a room, and the experts hired to read their minds can't agree on which one holds the stronger hand. Roberts of the Atlantic Council says Democrats' sweep of the Nov 3 midterms, held 9 days ago, ended Trump's ability to run China policy as a "one-man show." He says Beijing views Trump as "a weaker partner. I think he is a weaker partner." Drew Thompson of the S Rajaratnam School of International Studies says the opposite: "I don't think the midterm outcome changes Trump's leverage," noting that "The Supreme Court clipped his wings on tariffs. Congress can't."

Carsten Holz of the Hong Kong University of Science and Technology admits Trump "would not seem to have a coherent China policy and therefore his position in the upcoming talks in Shenzhen is hard to predict." Xu Qinduo of the Pangoal Institution in Beijing offers: "I think the Chinese side respects President Trump. He's strong." Nobody asks what the people living under these tariffs think.

Who Gets Crushed

The cost of living tells the story. The base reporting cites NBC News exit poll data: 49% of voters called the cost of living crucial and 40% a major factor. Some 66% believed Trump's tariffs hurt the economy. Barely 4% picked foreign policy as their top issue. The author of that analysis called the economic distress "self-created." Ordinary people felt the squeeze, then got handed a ballot.

The Election Trap

Democrats won control of both chambers, with control passing in January. What changes? Gabriel Wildau of Teneo says Trump "shows no sign that he intends to disrupt the current US-China rapprochement" but "may face new pressure from Congress and hawkish voices inside his administration." Lian Jye Su of Omdia calls a tough US line on AI and China "one of the rare political consensuses domestically across the aisle." Read that again. The one thing both parties agree on is a tougher posture toward Beijing. Voters got to pick the flavor of the management.

Meanwhile, allegations that Nvidia CEO Jensen Huang had an affair with a suspected Chinese spy have triggered demands for congressional investigations. China's foreign ministry called the claims "groundless speculation" and a smear campaign, and on Thursday accused the US of using them as a pretext to impose a technological "blockade" on Beijing. Asked Monday whether he would raise the Nvidia matter with Xi, Trump replied: "I don't think so." Thompson said "Xi certainly will not bring it up."

What They're Calling "Positive Atmospherics"

Lim Tai Wei of Japan's Soka University expects "positive symbolism, positive optics, and positive atmospherics." That's the product being sold. Xi told Trump in Washington in September to show "prudence" over Taiwan and urged the US to oppose the island's independence. Xu expects the leaders to discuss Taiwan and US arms sales to the island.

A Trump–Kim Jong-un meeting looks unlikely. Moon Chung-in of Yonsei University says Kim "will not come out just for a showcase. He still has the trauma of Hanoi." Possible one-on-one talks with Xi and three-way talks involving Russian President Vladimir Putin are also expected on the sidelines. Three rulers, one hallway. The rest of us get the bill.