The US continues to cut large checks in China, Japan and Germany


Therefore, it would be reasonable to relieve the sudden excitement that Trump and Chinese President Xi Jinping will resolve the issue of trade during the G-20 meeting in Buenos Aires, Argentina, starting on 30 November. There are many things to consider.

First, China is not in a hurry and is unlikely to rush into a trade deal. Beijing obviously believes that it can handle tariff walls and prove an unacceptably high political and economic price for the Trump, injuring, among other things, its constituency.

Secondly, trade issues raised by Washington hit some of China's systematic red lines in economic and financial management. This was a break in the deal last spring. Washington continues to insist on these "reforms", but Beijing is unlikely to yield.

Third, Trump probably had the opportunity to reach a temporary, practical trade deal, while claiming that he has created a friendly relationship with Xi. This agreement could halt and reverse the upward trend of US trade deficits with China, awaiting structural changes to achieve a sustainable position of balanced bilateral trade flows.

But this opportunity seems to have been lost. An unambiguous mutual trust between the US and China is limited, if any. Relations reverted to controversy over a wide range of issues, creating an unstable context for trade talks. Indeed, the summit can not cover the problems of sales and "official" contacts with Taiwan, b) the conflicts surrounding China's contested air and sea borders in East and South China, c) competition against profitable partnerships profitability, etc.

Trump was right to start with the trade problems of Canada and Mexico. He was leveraged and used it quite well. The next or simultaneous move would have been to do the same thing with Germany and Japan. The chances of success in redeploying trade relations with these two close allies were high.

With these three trade agreements under his belt, Trump would have put China in a difficult negotiating position. And a clear path towards the US-China trade agreement would have been set.

But this is now water under the bridge, and a real puzzle because Trump did not do the easy things first.

The irony is that there can no longer be "easy" trade solutions with Germany and Japan. Excited by Washington's problems with China, Tokyo and Berlin could now be much tougher customers.