President Trump updated us on Thursday about the status of U.S.-Chinese trade negotiations. Chinese negotiators are currently in Washington seeking an agreement to end U.S. tariffs. Trump’s update tweets were a mix of the good, the bad, and the ugly.
Let’s start with the good.
Looking for China to open their Markets not only to Financial Services, which they are now doing, but also to our Manufacturing, Farmers and other U.S. businesses and industries. Without this a deal would be unacceptable!
— Donald J. Trump (@realDonaldTrump) January 31, 2019
This is important. China currently restricts foreign companies from effectively competing with Chinese domestic manufacturers. Beijing does so by manipulating its currency to make imports more expensive. But China also provides vast subsidies to its own manufacturers, and legal barriers to entry to foreign competitors. Were Trump to reduce these de facto tariffs on U.S. companies, their Chinese market access would grow significantly. Trump gets an A+ here.
Now onto the bad.
….China’s representatives and I are trying to do a complete deal, leaving NOTHING unresolved on the table. All of the many problems are being discussed and will be hopefully resolved. Tariffs on China increase to 25% on March 1st, so all working hard to complete by that date!
— Donald J. Trump (@realDonaldTrump) January 31, 2019
The idea that “all the many problems” in U.S.-China trade are somehow going to be resolved is delusional. It’s concerning that Trump doesn’t seem to get this, because it’s quite a basic point. The issue here is not Trump’s positive focus on tariff reduction and expanded U.S. access to Chinese markets. It’s the ignorance of China’s usurpation of U.S. intellectual property. There is no way that the usurpation will end even if the Chinese pledge that it will. That’s because Chinese President Xi Jinping must continue to steal U.S. intellectual property in order to achieve his ultimate strategic ambition: China’s international economic and political hegemony. That Trump thinks he can get an all-encompassing deal means that he either does not read his intelligence briefings, or that he is so utterly enamored by Xi that he trusts him at his word.
That misplaced trust speaks to the final tweet of relevance, the ugly one.
….meeting with their top leaders and representatives today in the Oval Office. No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points. Very comprehensive transaction….
— Donald J. Trump (@realDonaldTrump) January 31, 2019
It’s ugly because Xi is not Trump’s friend. Instead, he is America’s adversary, the adversary of international democratic order, and the adversary of basic human rights. That doesn’t mean we should pursue confrontation with China or rule out mutually beneficial compromises. But Trump should deal with Xi with a clear picture of what’s really going on.
The better element here is that Trump’s policies on China have been excellent. China’s military imperialism in the South China Sea is meeting U.S. alliance-based encirclement (although the U.S. Navy is delusional in some areas). China’s Huawei-veiled theft of intellectual property is meeting U.S. interdiction for what it is: an existential threat to American prosperity. But when Trump deludes himself to believe that Xi is his friend, he risks replicating his interactions with Vladimir Putin: inspiring the Chinese leader to flower him with flattery and simultaneously cut him with political curve balls.
As I say, Trump’s tweets were a tale of the good, the bad, and the ugly.
