Recently, U.S. President Donald Trump had a phone call with Chinese President Xi Jinping, their first direct conversation since the escalation of the U.S.-China trade war. Trump touted the call as a success, emphasizing positive outcomes for both countries, including the resumption of rare earth mineral exports to the U.S. The call also led to an invitation for Trump to visit China, showcasing a surface-level improvement in relations.

However, beneath the trade tension easing and diplomatic gestures lies a subtle power shift favoring Xi in future negotiations. The call highlighted China's strategic advantage in the ongoing trade dispute, with Xi using Trump as a means to enhance his strong leadership image domestically and internationally.

Ace Up China's Sleeve

Despite the temporary relief in tensions following the call, the fragile state of U.S.-China relations remains evident. Beijing's suspension of rare earth shipments to the U.S. as a response to tariffs underscores China's willingness to leverage its rare earth materials in negotiations. Structural differences and unresolved issues continue to pose challenges to successful trade talks between the two nations.

While both countries agreed to a 90-day tariff truce in Geneva, disputes over currency manipulation and export subsidies persist. China's delayed resumption of rare earth exports following Trump's actions against Huawei indicates Beijing's strategic approach to negotiations and its awareness of the U.S.'s reliance on Chinese resources.

Xi's Tough Image

Trump's acknowledgment of Xi's toughness in negotiations, followed by the Chinese leader's passive response to the call, further solidified Xi's image as a strong and unwavering leader. China's portrayal of the call as initiated by Trump subtly positions Xi as holding the upper hand in the dispute, emphasizing China's commitment to its principles and agreements.

By refraining from initiating contact with Trump throughout the trade standoff, Xi projected strength and control, ultimately influencing the dynamics of the negotiations. The official Chinese statement post-call aimed to highlight U.S. shortcomings in upholding agreements, positioning Trump as the party moving closer to China's positions.

Future Implications

While the Trump-Xi call temporarily eased tensions and addressed some immediate concerns, the fundamental differences between the two countries suggest future talks may encounter obstacles. Beijing's adept use of rare earth exports as a bargaining chip indicates its preparedness and strategic advantage in negotiations.

As Trump navigates future trade discussions with Xi, the pressure is on the U.S. to avoid supply chain disruptions that could lead to economic instability. Xi's possession of a powerful bargaining tool in rare earth materials gives him a strategic edge and reinforces his image as a tough negotiator.

Should talks falter, the U.S. risks facing economic challenges and political repercussions, potentially strengthening Xi's position in future negotiations. Trump may find himself needing to engage with Xi again to revive discussions, further enhancing the Chinese president's image of dominance in the ongoing trade dispute.

Source: The Conversation