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Trump Meets China: What’s at Stake

President Trump will meet Chinese President Xi Jinping on Thursday, April 6. Our breakdown of Trump’s top leverage with Xi, and Xi’s top leverage with Trump.

A Trump sign in China

Chinese President Xi Jinping will visit Mar-a-Lago resort in Florida on Thursday, April 6 and Friday, April 7 for his first face-to-face meeting with President Trump.

Traditional media are focused on a few aspects of the Trump-Xi meeting, including: 1) Trump’s tough rhetoric on China’s trade practices, 2) the changing dynamics of how the U.S. and China lead on climate change, and 3) the location of Mar-a-Lago, and how that impacts the meeting.

Some of this coverage, though, misses an important point: both Trump and Xi have leverage over the other. That leverage is sure to factor in the dialogue, on either a public or a private front.

TRUMP’S LEVERAGE WITH XI

Trump’s top leverage with Xi may be an under-the-radar attempt by China to gain “market-economy status” under the World Trade Organization (WTO). The U.S. and the EU need to approve China’s status. Here’s why that’s important:

The Trump administration appears ready to formalize China’s unfavorable status in trade cases, which means the country’s goods would be eligible for higher U.S. tariffs, the paper said, citing documents from the U.S. Commerce Department website.

…Beijing said in its December complaint that WTO members were required to start treating it as a market economy from that month, the 15th anniversary of it joining the trade body. The Obama administration and the European Union declined to give China such status, and Beijing then filed a case against its two biggest trading partners with the organization.

Lower tariffs in the U.S. mean better access for China to U.S. markets. That’s worth a lot of money to China’s growing economy, and a lot of leverage for Trump.

XI’S LEVERAGE WITH TRUMP

Xi’s top leverage with Trump, at this point, may be the North Korea issue. As North Korea ramps up its testing in the age of Trump, and approaches its sixth nuclear test, the rogue nation becomes a major test for the new president.

China may be the only country that can rein North Korea in. Xi’s leadership on the issue may be necessary for the U.S. to reach a peaceful – and favorable – resolution, so his cooperation offers him some leverage with Trump.