At G-20 US, China rulers reach truce in trade dispute

By Roy Landersen
December 17, 2018

President Donald Trump and Chinese President Xi Jinping, met over dinner after the G-20 summit ended in Buenos Aires, Argentina, Dec. 1. They agreed to a 90-day truce over imposing any new punitive tariffs on Chinese imports by the White House. 

The announcement from Washington was greeted with relief in capitalist ruling circles from Europe to Asia, as capitalist production and trade worldwide is slowing down. The pause in any escalation of what is often superficially — and wrongly — referred to as a “trade war,” or even hyped as a new “Cold War,” sent stock markets back up for the moment. 

In return for Washington’s pause, the White House statement said that the Chinese delegation agreed to address the trade imbalance by buying a “very substantial amount of agricultural, energy, industrial and other products from the U.S.” The next day, Trump announced the Chinese government had agreed to “reduce and remove” its own retaliatory tariffs on imported U.S.-made cars. 

The White House said Xi had made commitments to discuss “structural changes [on] forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.” 

As of Dec. 4, the government-controlled press in China hasn’t mentioned most of this. Nor has it reported the Trump-led delegation’s only concession, the 90-day withholding of tariff increases. Because of the differences in what the two governments have or haven’t said, stocks have gyrated. Anti-Trump liberals have increasingly belittled the agreement. 

The Trump administration has been wielding tariffs, and the still greater size and weight of the U.S. capitalist economy, as a punishing weapon in its strategic competition with Beijing. Washington, though weakened, remains the number one capitalist power worldwide. And U.S. military might still far outreaches that of the Chinese rulers. But China’s rise is an increasing challenge to U.S. domination, from Asia to Latin America and Africa. 

“We are dealing from great strength, but China likewise has much to gain if and when a deal is completed,” Trump said. “Level the field!” Beijing is more vulnerable in this current duel, given Chinese exports to the U.S. market far outweigh those moving the other way. 

Washington has already levied tariffs on $250 billion worth of Chinese goods — about half of its exports — while Beijing reacted with extra duties on $110 billion of U.S. products. The White House was set to raise its tariffs from 10 to 25 percent at the start of 2019, but that step is now suspended. The onus is now on China to take steps to meet Washington’s demands. 

The G-20, a gathering of political figures supposedly representing the 20 largest world capitalist economies, is another multilateral institution suffering stress fractures as the crisis of capitalism sharpens the competition and national antagonisms among the rulers. 

These institutions that were hammered together after the U.S. emerged as the top dog from its victory in the second imperialist world war — NATO, the European Union, the World Bank, the G-20 and such — are increasingly coming apart. And the Trump administration, which acts on the conviction that one-on-one negotiations are the best way to win agreements that reflect the weight the U.S. rulers still command in the world, is deepening the pressure. 

Negotiators reported that as late as the first day of the meeting, it wasn’t clear if an agreement could be reached on a joint statement by the G-20. At one point U.S. officials questioned whether the statement really had to say that the International Monetary Fund is “at the center” of the global financial system. It was kept in after the EU negotiator replied, “Yes, it’s in Washington.” 

In the end, the official communiqué “buried their differences in obscure language,” Thomas Bernes, a former IMF and World Bank official, told the Australian newspaper Dec. 2. “The question is whether we are burying the G-20 in the process.”