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TWN
Info Service on WTO and Trade Issues (Jun25/06) Geneva, 6 Jun (D. Ravi Kanth) — United States President Donald Trump on 5 June discussed with Chinese President Xi Jinping rising trade-related frictions stemming from the seemingly restrictive measures adopted by both countries in different areas, including critical minerals, with Washington announcing a new round of high- level talks to iron out the thorny issues. Somewhat rattled over China’s move to slow down the supplies of critical minerals and rare earth magnets essential to the automobile and computer chip industries in response to US restrictions on the Chinese telecom giant Huawei, President Trump has been toying with the idea of a direct conversation with President Xi for the past several days. He even mentioned the complexities involved in resolving some of the sensitive and difficult issues in his comments at the Oval Office. Writing in his social media website Truth Social on 5 June, President Trump said: “I just concluded a very good phone call with President Xi of China, discussing some of the intricacies of our recently made, and agreed to, trade deal.” “The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both Countries,” he wrote, adding that “there should no longer be any questions respecting the complexity of Rare Earth products.” President Trump said, “Our respective teams will be meeting shortly at a location to be determined,” adding that the US team “will be represented by Secretary of the Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and United States Trade Representative (USTR), Ambassador Jamieson Greer.” Elaborating on the conversation, President Trump said “President Xi graciously invited the First Lady and me to visit China, and I reciprocated.” “As Presidents of two Great Nations,” he said, “this is something that we both look forward to doing.” President Trump also said that issues concerning trade dominated the conversation with President Xi. “The conversation was focused almost entirely on TRADE,” he said, emphasising that: “Nothing was discussed concerning Russia-Ukraine, or Iran.” For the first time, President Trump’s post seemed to be lacking any threats or intimidating statements and was more like a humble plea, said analysts. In response to a question at a briefing at the Oval Office, President Trump said that the trade talks were “a little bit off track” but that “it was only the complexity.” He admitted that trade issues are complex, saying that “it’s pretty complex stuff.” Contrary to his earlier characterization of President Xi as a tough leader to negotiate with, President Trump said, “two great leaders of the world in a very short period of time. We had a very good talk, and we’ve straightened out any complexity. It’s very complex stuff, and we’ve straightened it out.” He said that “the agreement was we’re going to have Scott [Bessent, the Treasury Secretary] and Howard [Lutnick, the Commerce Secretary] and Jamieson [Greer, the United States Trade Representative] will be going and meeting with their top people and continue it forward.” “But, no, I think we have everything,” President Trump said. “I think we’re in very good shape with China and the trade deal.” President Trump claimed that “we have a deal with China [the Geneva Agreement of 12 May], as you know, but we were straightening out some of the points, having to do mostly with rare-earth magnets and some other things.” Later, the USTR, Ambassador Jamieson Greer, told CNBC that there were problems and “no one can deny that.” The USTR claimed that Washington “did exactly what it was supposed to do and the Chinese are slow rolling their compliance, which is completely unacceptable and has to be addressed.” “As the President just said, very quickly, in Chinese compliance, or in this case, non-compliance, with the agreement,” the USTR said, expressing concern over China’s actions. According to the USTR, “when the Chinese retaliated, it wasn’t just with a tariff, they put in place counter-measures where they put certain US companies on blacklists.” “They restricted the flow of rare earth magnets to us and other countries in the world,” he said. The USTR maintained that “when they [Chinese] agreed in Geneva to remove their tariff and their counter-measures, they removed the tariff like we did, but some of the counter-measures, they slowed on.” Meanwhile, according to a news report by the Xinhua News Agency on the conversation between President Trump and President Xi, the two leaders held phone talks at President Trump’s request. In his somewhat nuanced message, President Xi seems to have emphasized that dialogue and cooperation are the only correct choice for China and the US. In his phone call with President Trump, he said that “re-calibrating the direction of the giant ship of China-US relations requires the two sides to take the helm and set the right course,” in order to “steer clear of the various disturbances and disruptions.” According to the Xinhua news report, President Xi highlighted the Geneva meeting as an “important step forward in resolving the relevant issues through dialogue and consultation, and [that] was welcomed by both societies and the international community.” The Chinese President appears to have conveyed that “the two sides need to make good use of the economic and trade consultation mechanism already in place, and seek win-win results in the spirit of equality and respect for each other’s concerns.” The Chinese side, President Xi said, “is sincere about this, and at the same time has its principles.” President Xi said the Chinese “always honor and deliver what has been promised”, urging both sides to make good on the agreement reached in Geneva. “In fact, China has been seriously and earnestly executing the agreement,” President Xi added. More importantly, President Xi urged the US to “remove the negative measures taken against China.” As previously reported in the SUNS, the US administration took several steps, including warning companies against using AI chips developed by the telecom giant Huawei. The US also decided to revoke the visas of Chinese students studying in US universities. According to the Xinhua news report, President Xi underscored the need for enhancing communication between the two sides “in such fields as foreign affairs, economy and trade, military, and law enforcement to build consensus, clear up misunderstandings, and strengthen cooperation.” The Chinese President said that “the US must handle the Taiwan question with prudence, so that the fringe separatists bent on “Taiwan independence” will not be able to drag China and the US into the dangerous terrain of confrontation and even conflict.” According to the Xinhua news report, President Trump stated that “the US will continue to uphold the one-China principle and reiterated that the Geneva trade talks were very successful, resulting in a strong agreement.” According to a report in the Wall Street Journal (WSJ) on 5 June, “the partly conflicting accounts of the conversation raised questions whether Trump had extracted a firm commitment from Xi to loosen controls over rare earths and other critical minerals.” “The asymmetry in Beijing’s and Washington’s reporting of the call suggests that Xi held a tough line and Trump did not get much acquiescence to his demands,” said Eshwar Prasad, a former senior International Monetary Fund (IMF) official in China and now an economics professor at Cornell University, as quoted in the WSJ report. +
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