If asked what will be the most consequential meeting this weekend in Argentina at the G20, you might have a hard time making up your mind. You’d have good reason to choose a) the Trump-Xi bilateral. But b), the gathering to sign the new Nafta deal, could also go awry.
We should certainly be concerned about what will transpire when President Donald Trump and President Xi Jinping have their sit-down. The prospects for diffusing the trade war look slim, but one can assume the Chinese have given serious thought to how they might take advantage of the American president’s impulsiveness and the lack of policy process in the US. They could present Trump with a face-saving deal to roll back tariffs. This would upset his advisers who are looking to force a “decoupling” between the two economies, but such a proposal would appeal to the president’s desire for quick wins. Still, it’s not the most likely outcome of this encounter. The more likely possibility is that the meeting will lead to greater tensions — and then more tariffs.
One would think that the signing of the new Nafta, called USMCA, would be a cause for celebration. But there is at least a small chance that it might not even occur. Canadian Prime Minister Justin Trudeau has injected uncertainty into the mix by announcing that there are still issues in the text to be resolved between the US and Canada. This is on top of Canadian unhappiness over the continued imposition of US tariffs on steel and aluminum.
Assuming the signing occurs, it is unlikely to be an event for the heads of state themselves. Earlier this month, Canada’s ambassador to the US, David MacNaughton, said that if steel tariffs remained in place, the most appropriate person to sign the USMCA from Canada’s side would be “the fourth secretary of [Canada’s] Buenos Aires Embassy."
A low-profile, begrudging signing, however, would be better than any further delay. Mexico’s new president, Andrés Manuel López Obrador, takes office on Saturday. It takes more than a little optimism to imagine that, given his past attitudes toward Nafta, he will be able to resist the urge to put his own fingerprints on a new deal.
Yet the meeting that perhaps had the largest downside for the US — the Trump-Putin talk — has been canceled by Trump. Delivering a tough message to Putin in the wake of the Russian seizure of Ukrainian ships in clear violation of international law is important for future peace and security. I, for one, have been holding my breath for the two years that Trump has been in office, expecting an adversary of the US to take advantage of the discord in our country and directly challenge America’s vital interests. Yes, there has been clear Russian push into the Middle East; and inflammatory rhetoric by Iran, North Korean, Venezuela and others. But there has been no blatant provocation or overt testing of the US. One might say this is just good luck, but more likely, Trump’s nature has in fact given pause to those interested in testing American limits.
Well, the luck or trepidation could be running out. Pushing US boundaries is exactly what Putin was doing in the Black Sea on Sunday. If Trump continued to meet Russian meddling at home and abroad with silence, he would become predictable to Putin.
Now would be a great moment for the American president to deliver a stern, in-person, and public message to Putin. Ideally, Trump would hold the meeting, clearly criticize Putin, and warn him of further sanctions or other punitive measures if the situation with Ukraine is not resolved soon. But if, for whatever reason, Trump cannot envision himself doing that, canceling the meeting was the next best option. Another photo op between Trump and Putin could have been disastrous now, unleashing a new level of Russian adventurism.
Bloomberg View
