Different Readouts, Modest Progress: U.S. and China Offer Varying Takes on Summit Results

Dow Jones
09/27

The White House issued a press release on Saturday touting the accomplishments of the U.S.-China summit meeting between President Donald Trump and China's leader Xi Jinping this past week. Just as notable as what was included in the readout was what was missing: agreements on Taiwan, semiconductors, rare earth metals, and other issues.

According to the White House, China agreed to take action on Chinese companies which supply synthetic opioids and their precursor chemicals to drug cartels. In addition to regulating orphines, the Chinese government is imposing export controls over two fentanyl precursors after arresting 21 people suspected of being part of this supply chain in August, the readout said.

The Chinese also agreed to purchase 20 million metric tons of coal from U.S. mines over the next two years, according to the White House. Though China is undergoing a rapid shift to renewable electricity generation, it still has many coal plants. According to the International Energy Agency, last year China imported about 500 million tons of coal, so the new commitment is relatively small. The Chinese readout of the summit contained no mention of coal.

The two countries also "reached consensus on recommendations for more favorable tariff treatment for $30 billion of non-sensitive goods in each direction," the readout said. This is an agreement to keep talking about trade, with no hard commitments. The figure represents about 11% of U.S. imports from China in the last 12 months, and 28% of U.S. exports.

However the Chinese readout of the meeting made it sound more definitive, calling it an "arrangement for a US$30 billion reciprocal tariff reduction."

Rare earth metals remain an open question for industry watchers. The two countries "continue to work on U.S. concerns regarding supply chain shortages related to rare earths and other critical minerals, with the goal of ensuring shipment levels return to appropriate levels," the White House said. China's press release did not mention rare earths.

The Atlanta Zoo will also be leasing two giant pandas from China, continuing a long tradition of "Panda Diplomacy" between the two countries.

Trump and Xi are expected to next meet at the November Asia Pacific Economic Cooperation conference in Shenzhen, China, and then again a month later in Miami for the G20 summit.

 

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