Starting Point: China Offers Trump Two Concessions on Trade

President Trump hosted China’s President Xi Jinping this past week at Mar-a-Lago, and reporting has indicated that the meeting went well.

“China was prepared to (raise the investment ceilings) in the BIT but those negotiations were put on hold (after Trump’s election victory),” the Financial Times also reported citing a Chinese official involved with the negotiating.

As reported by the Financial Times, China has offered the following concessions on trade:

  1. A drop on China’s ban on U.S. beef, which has been in place since a Mad Cow Disease scare in 2003.
  2. Foreign investors will be allowed to hold majority stakes in Chinese investment and securities companies. This concept was discussed during the Obama administration, and a Chinese official told the FT it would have gone through had Obama had a few more months in office.

Why does this matter?

Winning with trade is one of the most important factors of a Trump presidency. Trump has boasted for many years about being the greatest job creator, negotiator, and businessman on the planet, and if he can turn rhetoric into action, the U.S. will be in great shape moving forward.

Outside of the Trump team desperately needing to accomplish something meaningful, winning trade deals will be very important to Trump’s heartland voters.

Trump will more than likely never slap China with an astronomical tariff or label them as a currency manipulator, but China may also recognize that they can make great deals for themselves, too, given that Trump is so “flexible.”

Time will tell how this plays out long term, but China recognizes that they are dealing with an American president heavily involved with trade. And it may bring them to the negotiating table more often as both countries look to expand their influence.