U.S. President Donald Trump and Chinese President Xi Jinping may have agreed to meet in the margin of the G20 Summit in Buenos Aires on November 30, but analysts doubt that their meeting would lead to a breakthrough in the trade war between the two countries. According to insiders, the White House is considering excluding trade from the agenda of the meeting. Some of Trump’s trade advisers do not want to engage with China on trade until Beijing shows it is serious about addressing the U.S.’s list of negotiating demands. Meanwhile, Chinese officials complain that they are not sure who they should be working with in the Trump administration.

White House Economic Advisor Larry Kudlow told the Financial Times that Beijing had offered no sign that it was willing to meet U.S. demands in a way that could defuse tensions ahead of the meeting between the two presidents. Kudlow said the U.S. had given China “a detailed list of requests” but “the problem with the story is that they don’t respond. Nothing. Nada”.

Some analysts expect that China will ultimately win the trade war as it holds all the key economic cards. China’s solid external position, its pivotal U.S. Treasury holdings and plentiful policy options to fall back on give Beijing a strong hand over the U.S. if China plays its cards right. Beijing could slash interest rates, unleash a weaker yuan and dump U.S. Treasuries in the open market. The U.S. might be buzzing with strong growth and full employment, but weak economic links remain. America’s twin black holes – the large budget and trade gaps – are getting worse not better, complicating its future policy choices. China keeps racking up bigger trade surpluses over the U.S. The latest data showed a USD34.1 billion trade gap with China in September, a rise of nearly 20% from a year ago, with no sign of improvement. The underlying trend is still rising with the annual U.S.-China trade deficit heading to over USD400 billion, nearly double what it was a decade ago.

The U.S. Treasury may have concluded last week that China hasn’t been deliberately weakening the yuan, but it is “concerned” about its depreciation. These concerns are unlikely to abate. Markets may decide substantive arguments remain both for U.S. dollar strength and also specifically for continuing yuan weakness.

The U.S. trade deficit with China, which has ballooned since 2001, is responsible for the loss of millions of American jobs, according to a new study by the Washington-based Economic Policy Institute. More than 3.4 million U.S. jobs have been eliminated since Beijing joined the World Trade Organization (WTO) 17 years ago and has added over USD100 billion to the trade deficit since 2008. About 1.3 million of the job losses have occurred in the last 10 years. The development “has contributed heavily to the crisis in U.S. manufacturing employment”, according to the report. It said the job losses have been concentrated in the manufacturing sector, including industries in which the U.S. has traditionally held a competitive advantage. The trade deficit with China has cost jobs in all 50 states and in every congressional district, and grew the most in the computer and electronic parts industries, the report said. Other hard-hit sectors include apparel, electrical equipment and appliances. The researchers said “the U.S.-China trade relationship needs to undergo a fundamental change”.

Profit growth in China’s industrial enterprises slowed for the fifth month, weighed down by sluggish production and sales, as the economy faces mounting headwinds from the trade war with the United States. China’s industrial profits rose 4.1% in September from a year ago to CNY545.5 billion, slower than the 9.2% increase in August. China’s economy, which expanded in the third quarter at its slowest pace in a decade, is likely to slow further in the coming months, as the ongoing trade war with the U.S. takes its toll, according to Moody’s Analytics.