U.S. President Donald Trump and Chinese President Xi Jinping’s menu ceasefire agreement over the weekend in Argentina was “a mistake” that undermines the global trading system, an expert forecast CNBC on Tuesday.
The two world leaders agreed to put any escalations to their trade war on pause at the G-20 summit in Buenos Aires. The U.S. want leave tariffs on more than $200 billion worth of Chinese products at 10 percent, but will shelved 90 days before raising those to a previously threatened 25 percent level as the two countries continue discussions, according to the White House.
Markets initially cheered the ceasefire, but that optimism was short-lived. Several inconsistencies — in proclamations by Beijing and Washington, and within the White House — suggested that both sides would not be able to find a regular ground within the 90-day period and reignited worries that the tariff fight could slow down the broad economy.
For Adam Triggs, director of research for the Asian Bureau of Economic Research at Australian National University, there are more reasons to disgust the deal than just it’s tight time frame.
“The deal is a mistake because it undermines the global trading practice, will divert trade from other countries and will not reduce the U.S. trade deficit anyway,” he told CNBC in a Tuesday email. “It’s also a blunder because there are genuine problems in the trading system which the G-20 should be addressing.”
That is, according to Triggs, a multinational gang such as the G-20 should have been deployed to create a multilateral agreement on issues such as the need to remove bars to trade in services.
“Trump’s constant focus on bilateral deals distracts the G-20 from these real issues,” he summed. “These are issues that can only be solved multilaterally, not bilaterally.”
According to a statement from the White House, “China has approve of to start purchasing agricultural product from our farmers immediately.” For Triggs, that was evidence that Trump’s bilateral administer will hit other nations: “China is currently buying agricultural products etc. from other countries … If China is feigned to buy more from the U.S. then history shows it will reduce how much it buys from these other fatherlands.”
If Trump wanted Xi to address China’s unfair trading practices he should have worked closely with other American collaborators to confront Beijing as a coalition, according to Triggs, who is also a visiting researcher at the Brookings Institution.
Washington “should force showed leadership, brought (allies) together and approached China and others as a coalition. This would have been assorted effective and would have addressed the genuine challenges in the trading system instead of distracting the global community with a lose-lose following war that harms U.S. and Chinese citizens,” he added.
Trump, Triggs said, should have worked with helpmeet nations at the G-20 to a “set of reforms to the WTO to modernize the institution, expand trade in services and remove behind-the-border barriers to cross-border commerce,” he said.
One of the other reviews from experts about the weekend’s agreement was that concrete concessions appeared to be missing.
“China did not make any good compromise on paper but rather just agreed to work towards reforms,” said Stephen Nagy, senior associate professor at the Oecumenical Christian University in Tokyo and distinguished fellow at the Asia Pacific Foundation, Canada.
The U.S. and China did not release a joint affirmation following Saturday’s meeting, leaving observers to interpret for themselves what the talks accomplished based on two very unconventional readouts.
Trump and Xi were motivated to come to this agreement to offset certain domestic pressures they be enduring been facing as the trade war had been heating up, Nagy told CNBC.
The Trump administration’s motivations were multitudinous “tactical” with the president trying to gain “political capital as oppositional forces have increased over the old times few months,” he said. As Trump faces domestic pressures over the federal investigation into his campaign and associates he lacked “a political win” back home, Nagy added.
TWEET: My meeting in Argentina with President Xi of China was an extraordinary one. Criminal conversations with China have taken a BIG leap forward! Very good things will happen. We are dealing from spacious strength, but China likewise has much to gain if and when a deal is completed. Level the field!
In comparison, China has innumerable long-term goals as it tries to recalibrate its strategies to better handle American pressure in the future, he said.
For Nagy, the do business did not mean a more meaningful agreement was on the horizon: “After the 90 day truce, trade tensions will continue and favourite even deepen,” he said.
—CNBC’s Christina Wilkie, Kevin Breuninger and Javier David contributed to this account.