Trump-Xi Summit, USTR's G20 trade ministers meeting, and EU-China Trade Updates

Scott Miller (0:00)

I'm Scott. I'm Bill.

Alex Kisling (0:02)

And we're The Trade Guys.

You're listening to The Trade Guys, a podcast produced by CSIS, where we talk about trade in terms that everyone can understand. I'm Alex Kisling, and I'm here with Scott Miller and Bill Reinsch, the CSIS Trade Guys. Thanks for listening to The Trade Guys. On today's episode, we break down what came out of the Trump, Xi, Washington Summit. Then we look at the US. Trade Representatives' gathering of G20 Trade Ministers in Milwaukee and unpack why the EU is pressing China to limit exports of hybrid vehicles. All that and more on today's episode of The Trade Guys.

Welcome back to The Trade Guys, everyone. Bill and Scott, it's great to be back with you after a couple of guest episodes over the last few weeks. And one of those episodes previewed the Trump, Xi summit. So, I want to start there today and get your reactions now that the summit has come and gone. One of the big headlines coming out of the summit was that Trump and Xi agreed to extend the trade truce until January 10th. But beyond that, a lot of observers described the summit as heavy on pageantry and light on substance. So, Scott, after all the pomp, what did we actually get out of this summit?

Scott Miller (1:15)

Well, it's always hard to tell because there's so much that happens that's unseen in conversations, in meetings and in atmospherics with these things. They're difficult to evaluate beyond the public displays, which are often not particularly relevant to what happens in the future. So, it appeared to be well-timed and a cordial visit. One thing about President Trump is he's actually a terrific host. He's spent his life in the hospitality business. He's a real estate developer, but he develops hotels and resorts, and he himself is a very effective and personable host.

So, he puts an interesting structure to these things because of his past experience. I think that it appeared to be well done in terms of what they intended to execute. From a trade standpoint or economic policy standpoint, I think it seemed to have the effect of reducing tensions, which I see as a good thing.

There is a continuation of, we're unhappy with each other's policies to some respect, and we're not prepared to solve all problems, but we're prepared to stop hurting ourselves in the case of things like tariffs and fertilizer materials and things that we are essential to import from China. We want to continue to import them at a reasonable cost. Those are the areas where tariffs were reduced. Same goes for the US exports that are essential for the Chinese economy. Nobody had to surrender anything to get there. It looked like a move to sort of calm the waters, which I think is good. Now, I would point out that there are some sizable economic issues that aren't trade related, that were important, were tabled, and seemed to be progressing in a reasonable matter. On the forward-looking one, it would be artificial intelligence and the commitment to work together in that program and the concept as it continues to occupy a lot of the top-of-mind issues of our government and others.

It's generating obviously massive investment and things like that. Having cooperation or at least understanding of each other's actions on AI, I think, is a good thing. The second thing I would note is our strategy in the Iranian conflict has some direct economic impacts on China. In a general sense, discounted petroleum is no longer available. They were a major consumer of Iranian oil one way or another. And that's something that's affecting them that an overreaction or a direct reaction might be unhelpful to the conduct of efforts by the United States and allies in the Gulf. Also, I would note that the operation being run by the Treasury Department of NOFAC has some economic actors from Hong Kong.

Not a full-fledged bank, but a number of traders who operate out of Hong Kong have been exposed and essentially put out of business. So that have been anything but difficult for China. And the absence of a reaction or China coming into the conflict in support of Iran, I think is probably helpful overall to what the US and others are trying to achieve. So I think those are the more important economic factors. As a trade guy, I'm glad to see trade kind of cool down a little bit for a while. But you get what you get out of these summits and maybe five years later somebody will write the story.

Alex Kisling (4:24)

Yeah, I want to dig in a couple of things here. But Bill, I want to get your reactions first. And please folks, if you've not read Bill's column on the summit, please do. Bill, what was the title of that column?