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Top 3 issues on table for Trump, Chinese president’s meeting

It is perhaps President Trump’s most important meeting with a world leader yet — a high-stakes summit between two of the world’s greatest powers amid heated rhetoric and heightened tensions.

Trump and his top advisers will host Chinese president Xi Jinping and his delegation this Thursday for two days of meetings at the president’s golf club Mar-a-Lago in Florida — even though Xi does not golf. It’s the first time the two leaders will meet face-to-face after Trump famously bashed China on the campaign trail.

Since coming into office, Trump has taken a more muted tone on China, agreeing to the one-China policy and so far declining to label China a currency manipulator. Still, there are several critical issues on the table that the two sides will have to address, including the increasingly dangerous threat from North Korea and one of Trump’s principal talking points, trade.

As Trump himself tweeted last week, “The meeting next week with China will be a very difficult one.”

NORTH KOREA

North Korea is reportedly on the verge of its sixth nuclear test as the country moves closer and closer towards its stated goal of an intercontinental ballistic missile capable of reaching the U.S. with a nuclear bomb.

That threat has pushed the Trump administration to make North Korea a top priority. Secretary of Defense James Mattis and Secretary of State Rex Tillerson have both visited allies in the region, and Vice President will reportedly do the same this month.

In particular, Trump has been keen to put pressure on China to do more to bring North Korea to the table and relinquish their pursuit of a nuclear-tipped ICBM.

“China has great influence over North Korea. And China will either decide to help us with North Korea, or they won’t,” Trump told the Financial Times Sunday. “And if they do, that will be very good for China, and if they don’t, it won’t be good for anyone.”

That kind of threat has been echoed by Trump’s top foreign policy advisers, but it hasn’t moved China much so far — and Trump promised Sunday, “If China is not going to solve North Korea, we will.”

What options the administration has to do so remains unclear. Secretary Tillerson said while in South Korea that diplomatic efforts had failed and that preemptive military strikes are on the table.

China has increased some pressure on North Korea, recently halting the purchase of coal from its neighbor. But as North Korea’s largest trading partner, there is more China could do to pressure the reclusive country economically. China’s leaders, however, fear any instability in the country, including the possibility of North Korean refugees pouring over their border.

Instead, China has called on the U.S. and South Korea to stop joint military exercises in exchange for a halt to North Korea’s nuclear and weapons tests. The U.S. has rebuffed that offer, calling the two “apples and oranges.”

Finding some common ground and a way forward will be critical to global security.

TRADE

When Trump bashed China as a candidate, it was almost always on the issue of trade.

“We can no longer have massive trade deficits and job losses. American companies must be prepared to look at other alternatives,” he tweeted Thursday.

“We cannot continue to trade if we are going to have an unfair deal like we have right now. This is an unfair deal,” he told the Financial Times Sunday.

But since he took the oath of office, there has been more talk than action.

Trump signed two executive orders Friday, initiating a review of trade deficits and strengthening some anti-dumping enforcement. Beyond that, though, he has done little to change the trade relationship with China, besides withdrawing from the Trans-Pacific Partnership, which critics says benefited China as it negotiates its own trade agreement that excludes the U.S.

Candidate Trump proposed taxing imports from China — at one point, by as much as 45%, but later denying that. But more recently, Trump has refused to say whether such a tariff is still on the table, but critics warn that doing so could lead to a trade war as China retaliates with its own tariffs.

Republicans have also been talking about a border adjustment tax, which would tax American companies that import goods from other countries, including China, but Trump has wavered on whether he supports that, too.

One aspect of the economic relationship where Trump has whiffed so far is labeling China a currency manipulator, which he promised to do on day one of his administration. Treasury Secretary Steve Mnuchin said in February the administration will use current processes to determine if China is manipulating its currency. Previous reviews have found that they did not, and economists say that more recently, China has been trying to boost its currency, not manipulate it lower, amid an economic slowdown in the country.

All of this will be on the table, with nearly $660 billion of trade hanging in the balance.

SOUTH CHINA SEA

The Trump team has also talked tough on the South China Sea as well. Top administration officials have said the U.S. will defend these international territories from a takeover, even as China continues to build them up and install military facilities on them. It’s unclear if the White House will include those concerns in this week’s meetings.

In his confirmation hearing in January, Tillerson compared China’s actions to Russia’s annexation of Crimea, adding, “We’re going to have to send China a clear signal that first, the island-building stops, and second, your access to those islands is also not going to be allowed."

What could be seen as a threat of military action has been dismissed and defied by China. So far, the U.S. has taken no new steps to send that signal, and China has warned the U.S. not to get involved in what it sees as a regional issue.

“The United States is not a country directly involved in the South China Sea,” a Chinese foreign ministry spokesperson said in January. “We urge the United States to respect facts and speak and act cautiously to avoid damaging peace and stability in the area.”

Previously, the U.S. had not taken a position on who had claim to each island, but asserted its right to freedom of navigation in the waters around and the air above them. The maritime area hosts about half of the world’s commercial shipping, as well as key fisheries and natural resource reserves.