For Xi Jinping, a vexing question: Can Donald Trump be trusted?

Chinese President Xi Jinping (left) and US counterpart Donald Trump attending a ceremony at the Great Hall of the People in Beijing in 2017.
Chinese President Xi Jinping (left) and US counterpart Donald Trump attending a ceremony at the Great Hall of the People in Beijing in 2017.PHOTO: AFP

WASHINGTON (BLOOMBERG) - Mr Donald Trump regularly touts the strength of his personal relationship with Mr Xi Jinping, talking about the Chinese leader in the sort of warm terms US presidents normally reserve for longstanding allies.

Yet as the world's two largest economies inch towards a trade agreement designed to define and reorder their economic relationship for years to come, one question looms large: Does Mr Xi trust Mr Trump enough to get on a plane and seal the deal?

Mr Trump and his aides have for weeks been pushing for Mr Xi to agree to a meeting at Mar-a-Lago, the President's club and resort in Palm Beach, Florida, to finalise a deal as soon as this month to end a dispute that has cast a shadow over the global economy. '

Mr Trump himself has said that it's only when the two leaders meet that the final details can be ironed out.

Chinese officials, however, have long been wary of putting Mr Xi in a position where he might be embarrassed by an unpredictable Mr Trump or forced into last-minute concessions.

"That is the real conundrum for Xi," said Professor Eswar Prasad, an expert on the Chinese economy at Cornell University who regularly meets with senior officials in Beijing.

"The concern about being snookered by Trump at the negotiating table is a real risk for Xi."

China's worries are flipping the US script on its head. As he claims to be the first American President to stand up to Beijing, his aides have built a possible deal on a foundation of distrust.

In their view, a China that has for decades lied and cheated its way to economic success cannot be trusted to live up to any commitments unless a deal has teeth.

"That's the fundamental question," Mr Robert Lighthizer, the US trade representative, told Congress on Feb 27. "What the President wants is an agreement that number one is enforceable."

Officials in Beijing insist they've played by international rules and just want to be sure Mr Trump won't again kill an agreement at the last minute.

Mr Trump has rejected at least two deals brought to him since he first hosted Mr Xi at Mar-a-Lago in April 2017: One struck by Commerce Secretary Wilbur Ross for China to cut steel overcapacity, and another negotiated by Treasury Secretary Steven Mnuchin last year. Both would've averted the trade deal.

The latter one was particularly jarring for Mr Xi, who faces pressure in China to avoid giving up too much in a deal with Mr Trump.

Vice-Premier Liu He came to Washington as Mr Xi's special representative, and declared to China's state-run media that a trade war had been averted.

After Mr Trump backtracked, talks stalled for months until the two leaders met in December at the Group of 20 summit in Argentina.

Last month, Mr Trump's decision to walk away from his Hanoi summit with North Korea's Kim Jong Un without a deal only reinforced China's concerns about the President's unpredictability.

Former Commerce Vice-Minister Wei Jianguo argues that because the US and China are great powers, Mr Trump would never walk away from Mr Xi as he did Mr Kim. The consequences would be too great.

"It is important to boost confidence in a slowing global economy," Mr Wei said.

There are parallels for the Chinese.

In 1999, Chinese Premier Zhu Rongji returned from Washington believing he had successfully negotiated China's accession to the World Trade Organisation only to have the Clinton administration reverse itself for domestic reasons.

That led to a backlash from China's nationalists.

Ms Erin Ennis, who tracks the negotiations for the US-China Business Council, said a Trump snub of Mr Xi this time around would be an order of magnitude greater than any previously.

Then again, she said, "I don't think the Chinese are the only government in the world that is not entirely sure what they are getting when they send their head of state into a meeting with the President of the United States."


Mr Trump has for months pushed to sign a deal, and that has fundamentally changed the dynamics of negotiations. In recent days, both sides have held daily conference calls.

China last week revised an offer on intellectual property protection, one focal point of the negotiations, according to people briefed on the offer.

It has also pledged to increase purchases of American goods by US$1.2 trillion (S$1.63 trillion) over six years and to open its market in some key sectors, raising hopes that it might finally allow US firms to compete in forbidden areas such as cloud computing.

As a deal gets closer, Chinese officials also want the US to agree that any commitments go both ways, particularly on enforcement.

The US wants China to agree not to retaliate against any punitive measures Washington might apply if Beijing doesn't meet its commitments.

But Vice-Commerce Minister Wang Shouwen over the weekend countered any enforcement mechanism would have to be "two-way, fair and equal".


"I'm not sure if China would ever allow the United States to be the judge, jury and sheriff on these issues and that seems to be the core of what the US is asking for," said Ms Wendy Cutler, a former senior US trade negotiator who heads the Asia Society Policy Institute.

Mr Trump could see political benefits from walking away from a deal. He's already facing questions about the quality of the agreement and whether the trade war he started - and the economic damage it has brought in farm states in particular - will prove to have been worth it.

Some hawks inside his administration also fear Mr Trump is being led into a bad deal with a China that will remain a growing strategic threat.

Still, both presidents have their reasons to settle their differences.

Mr Trump is under pressure to prove his "America First" trade policies can deliver, the evidence for which is mixed so far.

Since 2016, the US trade deficit - Mr Trump's own favourite metric - has blown out by almost US$120 billion, or more than 20 per cent.

Meanwhile, a successful summit in Mar-a-Lago would enable Mr Xi to silence his own domestic critics, said Professor Steve Tsang, director of the SOAS China Institute at the University of London.

"If he cannot get some kind of a 'decent' deal with Trump and the economy continues to slide, the pressure on Xi will build up," he said.