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One Belt, One Road, Multiple Risks: China, Italy Deal Made Di Maio's Mission to the US Complicat

Deputy Prime Minister Luigi Di Maio at the Consulate General of Italy in New York.

New York: Deputy Prime Minister Luigi Di Maio insisted that Italy's endorsement of China's ambitious "Belt and Road infrastructure plan is an economic agreement," but the US administration looks worried about the political consequences of the memorandum.

Di Maio, who leads the 5-Star Movement, traveled this week to New York and Washington for a 3-day mission in the US.

Initially scheduled in January, the mission was postponed to March because of the 35-day US government shutdown.

The Chinese President XI Jinping (left) and the Italian Prime Minister Giuseppe Conte in Rome, Italy.

And it accidentally came after Chinese President Xi Jinping's visit to Rome, when Italy signed deals with China for 2.5 billion euros ($2.8 billion), becoming the first major Western power to back the Chinese Bel and Road Initiative (BRI).

This political move by Italy provoked irritation to both US and European allies.

In New York, Di Maio greeted the Italian community at the Consulate General of Italy and visited the New York Stock Exchange on Wednesday.

US National Adviser John Bolton (left) and Deputy Prime Minister Luigi Di Maio in Washington, DC,

In Washington, he met with the US Secretary of Commerce, Wilbur Ross, and representatives of tech companies such as Amazon, Apple, Facebook, Virgin Galactic, Google. Then, Thursday he discussed over China Venezuela and Nato with John Bolton, the US National Adviser of the Trump administration.

"Our agreement with China is a trade agreement, it is not a political pact," Di Maio told the Italian media during a press conference at the Italian Trade Commission office in New York Wednesday.

"It is an important memorandum for us, a day when Made in Italy has won, Italy has won and Italian companies have won," he added.

Taking advantage of Xi's visit, Italian firms inked deals with Chinese counterparts that had "potential value of 20 billion euros", according to Di Maio.

"For the first time, Italy jumped into a trade opportunity before than other European countries, which signed similar agreements after we did", the Deputy Prime Minister emphasized, referring to the 30-billion euros deal Airbus signed with China coinciding with a visit to France by Chinese President Xi Jinping.

Deputy Prime Minister Luigi Di Maio (left) and the Italian Ambassador to the US, Armando Varricchio, in New York.

Italy's populist government endorsed the BRI initiative to lift the economy out of its third recession in a decade and to re-balance the trade deficit that Italy registered with China in 2018 of 17.6 billion euros ($19.7 billion).

But there is another country which is looking at a different trade deficit with worrying eyes: the United States.

According to US Trade Numbers, the trade deficit that the US registered with Italy in 2018 was of 28.1 billion euros ($31,6 billion).

"We will work something out to fix it," US President Donald Trump had said during a joint press conference last summer with Italian Prime Minister, Giuseppe Conte, at the White House.

Italian Prime Minister Giuseppe Conte (left) and the US President Donald Trump during the press conference at the White House.

But the Trump administration later recognized the importance of 'Made in Italy' in the US market and did not fight the deficit yet.

The memorandum on BRI signed with China by the Italian government, however, set the conversation on another plan: political.

"Of course, every trade agreement is the result of political relationships," Di Maio admitted to the Italian media in New York on Wednesday. But, the Deputy Prime Minister added, "our allies are the United States of America as always."

"The focus of the memorandum with China is a trade deal and I am sure Donald Trump, who is an entrepreneur, will understand it," he insisted.

The Trump administration, however, did not express sympathy toward the BRI's Italian endorsement.

At the White House, Di Maio was supposed to meet one of the Economic Advisers of Trump administration, according to three people with knowledge of the situation.

The US Administration, instead, has proposed John Bolton, an institutional figure who handles political relationships between Trump administration and his allies, but also between Trump administration and his competitors.

Observers regarded Bolton's pick as a sign of respect for Italy, considering the close ties the US National Adviser has with President.

But it was also a demonstration of Trump's worries on the political repercussions that the new trade agreement between China and Italy can have.

John Bolton described as "strong" the partnership in NATO between the US and Italy in a tweet late Thursday after he met with Di Maio at the White House.

"Met Italy’s Deputy PM Di Maio this afternoon to discuss U.S.-Italian cooperation on the crisis in Venezuela, managing our relationship with China, and our strong security partnership in NATO," Bolton tweeted.

The conversation between Bolton and Di Maio was friendly and cordial, according to two people with knowledge of the situation.

But Italians and Americans are keeping throwing digs each other.

On Wednesday, Secretary of State Mike Pompeo told the House Foreign Affairs Committee that it is "disappointing anytime any country begins to engage in behavior and commercial interactions with China that aren't straight up."

Pompeo also said he was "saddened" over Italy's move.

Italian Undersecretary of Economic Development Michele Geraci immediately replied to Pompeo from the Chinese island of Hainan, where he was attending the annual conference of Boao Forum for Asia.

"The U.S. should worry about having debt in Chinese hands," Geraci told the South China Morning Post, indicating Beijing's possession of some $1.13 trillion in U.S. Treasury bills, notes, and bonds.

"They are in a situation where they need to be concerned, that’s why maybe they worry," he concluded.

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