'NOT COINCIDENTAL’: Chang sounds alarm on North Korea–Putin alliance

Key Concepts

• US-China Trade Relations: Focus on President Trump's expectation of a "fair deal" with China, addressing perceived long-standing trade imbalances.
• Xi Jinping's Political Situation: Discussion of internal political instability within China, potential infighting within the Communist Party, and its impact on Xi Jinping's ability to meet with President Trump.
• Rare-Earth Minerals: China's control over rare-earth minerals and the potential for this to be used as leverage in trade negotiations.
• North Korea's Missile Tests: The timing of North Korea's short-range ballistic missile tests in relation to President Trump's Asia trip and potential motivations.

US-China Trade Deal Prospects and Challenges

President Trump expressed optimism about meeting with Chinese President Xi Jinping during his upcoming trip to Asia, aiming to strike a "fair deal" with Beijing. He highlighted the significant trade deficit the U.S. has experienced for years, estimating it at "$5 to $6,700,000,000,000," which he believes has contributed to China's military buildup at the expense of the U.S. Trump stated, "Now we can have a fair deal in a very successful meeting." However, he also cast doubt on the meeting's certainty, noting that "maybe it won't happen, things can happen."

Factors Influencing the Xi-Trump Meeting

Gordon Chang, Senior Fellow at the Gatestone Institute, offered a more cautious perspective, assessing the likelihood of the meeting at "50/50." He explained that historically, Chinese leaders would only meet with a U.S. President if a deal was assured. Chang pointed to several reasons why Xi Jinping might hesitate or be unable to meet:

• Internal Political Instability: There are reports of intense infighting at the top of the Chinese Communist Party. Nine senior flag officers, described as Xi Jinping loyalists, were recently removed, suggesting that adversaries may currently have the upper hand.
• Risk of Not Being Permitted to Leave China: Due to the internal political climate, Xi Jinping might not be permitted to leave China, or he may decide not to leave for fear of not being able to regain his position upon return.
• Uncertainty of Meeting Outcome: The extent of this instability is unknown, and it's possible that Xi Jinping might not want to lead from the center of power if he is perceived to be in trouble.
• Health Concerns: Reports about Xi Jinping's health, though unconfirmed due to the opacity of information within China, are also a factor being discussed, alongside his hold on power.

Chang concluded that the political system in Beijing is deteriorating, making a trade deal less likely.

China's Leverage and US Response

The discussion touched upon China's potential use of its control over rare-earth minerals as leverage. This comes in response to reports that the U.S. is considering restricting exports of American-made software to China, a move seen as a reaction to China's own controls on rare-earth minerals. President Trump's earlier rare-earth agreement with Australia was also mentioned.

The Chinese Embassy responded to the "Ice Trail You Deal" (likely referring to a specific trade initiative or statement), stating that global industrial supply chains are shaped by market choices. They emphasized that countries with mineral resources need to play a positive role in keeping relevant industrial supply chains safe and stable, ensuring normal trade and economic cooperation.

Analysis of China's Statement

Gordon Chang found the Chinese Embassy's statement "ludicrous." He argued that China is the one restricting exports of rare-earth minerals, not only to the United States but to other countries as well. He characterized their statement about ensuring supply chain resilience as "insane" and indicative of the problems in Beijing. Chang believes that nobody in China can make concessions to the U.S. for fear of later accountability when the political landscape shifts. This reluctance to make decisions, he argued, poses a problem for the U.S. in reaching a trade deal, even with President Trump's negotiation skills.

Trade Figures

China's exports to the U.S. are reported to be approximately $1 billion per day.

North Korea's Missile Tests and Geopolitical Implications

The conversation shifted to North Korea's launch of multiple short-range ballistic missiles just days before President Trump's Asia trip. While acknowledging that North Korea frequently tests short-range ballistic missiles, the timing was deemed not coincidental. It was suggested that North Korea might have conducted these tests to complicate President Trump's visit, potentially on the orders of Vladimir Putin or Xi Jinping, or both.

President Trump's efforts to engage in accommodation with North Korea were mentioned, with the sentiment that it would be beneficial if successful. However, it was also noted that Kim Jong-un has made it clear that entering into any arrangement with the United States would be extremely difficult.

Synthesis and Conclusion

The overarching theme is the precarious state of U.S.-China relations and the uncertain prospects of a trade deal. President Trump's desire for a "fair deal" is juxtaposed against significant internal political challenges within China that may prevent President Xi Jinping from engaging in meaningful negotiations. China's control over rare-earth minerals remains a key point of contention, with its recent statements being met with strong criticism. Furthermore, North Korea's missile tests add another layer of geopolitical complexity to President Trump's upcoming Asia trip, potentially serving as a deliberate disruption. The overall sentiment suggests that while a meeting might occur, the conditions within China make a constructive trade discussion less likely.