U.S.-China relations are rocky as the nations face off over trade issues and how to manage North Korea's nuclear threat, but you wouldn't guess the two were on such uncertain terms by China's reception of U.S. President Donald Trump this week. Beijing hosted lavish banquets for Trump and unveiled a host of bilateral business deals. Chinese President Xi Jinping greeted Trump at China's Forbidden City — a World Heritage Site — on Nov. 8, while other leaders attended a business ceremony, during which $9 billion in business deals were agreed upon. Another 15 business agreements were signed later in the trip, bringing the total value of the deals to $253. 4 billion. Like the trip, however, the deals may be less rosy than they initially seem.
The agreements spanned a wide range of sectors, including energy and transportation, and included an agreement to advance a $43 billion liquefied natural gas project in Alaska; shale gas and chemical manufacturing projects in West Virginia by Chinese conglomerates; purchases of Boeing planes and Bell helicopters; and expanded imports of U.S. agricultural products including beef and pork. But some of the deals may be less substantive than they seem: Many were non-binding memorandums of understanding, including the multi-billion dollar deals on energy. Others were repackaged existing deals. For example, the $37 billion deal with Boeing reportedly consists mostly of previously agreed upon terms, and it's unclear if the contracts include any new purchases.
As Trump moves forward on his "America First" policy and increases trade pressure on China, including by employing Section 301 of the U.S. Trade Act of 1974 to investigate China's patent review process, Beijing felt compelled to demonstrate its commitment to rectifying what Trump has called the lopsided economic relationship between the United States and China. Until now, Beijing's strategy has been to offer limited concessions to the United States that were just enough to ease the pressure of U.S. demands. It seems as if these most recent business deals are similarly limited, but it will take time to see if any concrete changes manifest from the agreements.
Neither side appeared compelled to tackle difficult topics aggravating the U.S.-China economic relationship, most notably U.S. demands for greater market access and its protectionist policies and Chinese concerns about hurdles to investing in U.S. high-technology industries. Beyond issues of economics and trade, each leader kept steadfast on their country's chief political concerns: North Korea for the United States, and Taiwan for China. The fundamental competing national interests related to each issue won't be resolved through the niceties displayed on Trump's trip, and tension will continue to mount between the two nations.
