What will Xi demand in return for maintaining some sort of equilibrium on trade? Here is a big part of the list:
- STABILITY ON TARIFFS: The current level of tariffs and the various agreements with the EU and others hasn’t prevented China from increasing its already vast trade surplus relative to the rest of the world. Just don’t do any more wrecking, please.
- COMPENSATION FOR LOST INVESTMENTS IN THE WESTERN HEMISPHERE: Xi hasn’t done much in response to Trump’s aggression pertaining to the Panama Canal, Cuba, and Venezuela. Expect him to demand compensation of some sort–probably in the form of a freer hand in his own backyard. This could ultimately turn into a spheres of influence agreement.
- TAIWAN, ALL THE TIME: This is where he really wants the free hand. At a minimum, expect Trump to move carefully in this direction in return for the trade concessions he considers more important.
- END THE IRAN WAR, PLEASE: China is profiting to some extent from the war, but its fuel stockpiles won’t last forever. Something has to give reasonably soon.