Beijing, however, already has its own campaign to reduce overcapacity, so “for Xi to accede to U.S. demands on that front, it would be one of the most blatant giveaways to the Americans,” Beddor said.
That is, agreeing to Washington’s quantitative targets when Beijing has already set a benchmark elsewhere in the system would be difficult, he said.
“This is coming at a time when Xi’s preparing for the 19th Party Congress so this is a very politically sensitive time for him,” Beddor added.
Given Trump’s willingness to press on overcapacity, more trade tensions are now likely in the second half, said Consonery.
Due to the fundamental differences between both administrations and the outcome of Wednesday’s meeting, “some sort of trade action is increasingly likely,” said Beddor.
