The View From Asia: Trump-Xi Deal Is Just a Temporary Truce

The View From Asia: Trump-Xi Deal Is Just a Temporary Truce

This story originally appeared on TheStreet.com.

It was over Argentinian steak that Chinese President Xi Jinping and his U.S. counterpart President Donald Trump hashed out a trade truce in Buenos Aires over the weekend. But it is Chinese factory owners who will be most relieved.

Xi and Trump agreed for a ceasefire in their increasingly fraught war, meaning U.S. tariffs will not raise from 10% to 25% on Jan. 1, as planned, with further talks to hash out future trade to come.

Here in Asia, we are well aware that this is only a temporary truce. Hostilities have only been suspended for 90 days. Trump continues to play both roles in the good cop/bad cop routine with Xi, sweet talking Xi in person. That kind of “face” goes down very well in China, where both the government and the people at large are desperate for recognition on the world stage.

No doubt, the agreement has eased immediate fears, which were undoubtedly unsettling investors in Asia. Emerging markets in particular have been paying a heavy price, more so as investors try to reduce risk than because of any direct effects from the trade war.

I’m writing this from Jakarta, and the Indonesian rupiah has been shaken like a palm-oil plant in a typhoon by potential disruptions to economic growth in the region, as well as U.S. interest rates rising. Earlier this year, the rupiah sank to levels last seen during the Asian financial crisis 20 years ago.

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Trump Takes on China in Trade, but Is Wrong With His Attack

Trump Takes on China in Trade, but Is Wrong With His Attack

U.S. President Donald Trump stood side by side with Chinese President Xi Jinping on Thursday, despite the fact that Trump continues to depict — wrongly — the China-U.S. trade relationship as toe-to-toe.

That relationship is “one-sided and unfair,” Trump said in a joint address in Beijing. There’s the “shockingly high” trade deficit to consider, he explained. There’s also the $300 billion in the theft of U.S. intellectual property and forced technology transfer that the United States suffers every year, per U.S. government figures.

Trump has, to be fair, delivered on this, the most-important trip of his presidency. He has conveyed more precisely in person his message that the United States is disadvantaged by its trade with China and Japan. He’s wrong, but he’s right to express himself so clearly when he previously fudged the point when meeting the leaders of those countries on home soil.

At least he won applause from the assembled Chinese and U.S. executives in attendance to hear the two leaders speak. It was for a back-handed compliment.

“I don’t blame China,” Trump conceded, pausing when clapping began. “Who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit.” Cue more applause.

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China’s New Leaders Are No Threat to President Xi

China’s New Leaders Are No Threat to President Xi

China’s new roster of top leaders have shuffled into their places on the red carpet for their curtain call, the procession leaving no question as to who is in charge. President Xi Jinping has been reappointed to head the Communist Party, with no one waiting in the wings as his nominated heir.

What’s more, not one of the new members of the Politburo Standing Committee, China’s cabinet, is under the age of 60, meaning none of them is likely to succeed Xi when and if he stands down at the end of his second term in 2022.

It’s a highly unusual move, unprecedented in recent years, leaving Xi to continue his push for reform and fight against corruption unquestioned. Critics worry that Xi’s “rule” has evolved into a dictatorship, the president eliminating rivals who question his positions and squelching stories about his family’s amassed wealth.

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