Reaching a beneficial trade deal with China requires President Trump to play hardball with Beijing.
Trump’s tweets on Tuesday morning were thus positive in their arrogant confidence.
…to ripoff the USA, even bigger and better than ever before. The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now…or no deal at all. We have all the cards, our past leaders never got it!
— Donald J. Trump (@realDonaldTrump) July 30, 2019
Trump is right about China’s game-playing, and he can argue that Joe Biden would cut a worse deal. But he must be cautious. If China senses that the president is desperate for a trade deal, it will refuse to make serious concessions to get there.
It’s a relevant concern because these tweets come on the heels of Trump’s recent appeasement of President Xi Jinping at a G-20 summit. Xi and his inner circle know Trump sees a strong economy as critical to his reelection.
But as he notes, Trump has good cards to play here.
For a start, American economic strength is contrasted by China’s current economic weakness. With growth slowing and foreign investors departing, China’s economy is under significant pressure. Xi has a double-edged problem in this regard: He needs to restore global confidence and generate enough capital to increase his own foreign investments. Those investments are the cornerstone of Xi’s strategy to displace the U.S.-led international order with a feudal-mercantile order that sees Beijing at the top. Yet with Chinese demands for greater political rights increasing (see Hong Kong), Xi’s ability to balance his authoritarian control with sustained growth is also in question.
All of this means that Xi wants a trade deal as much as the United States does. But Xi won’t admit that publicly in fear of encouraging Trump’s hardball approach to dealing.
Trump must hold to these truths if he wants to prove himself master of the art of the deal. But that doesn’t mean he should reject a deal per se. The U.S. cannot allow China to dominate the global telecommunications industry. But the U.S. and China would benefit from a trade deal all the same. That’s exactly why Trump must remain tough but open to a deal.
