Beijing may be calm before the Trump trade storm
He may have come east in peace, but it won't last. The US president remains determined to turn the clock back to 1985, when currency tweaks and tariffs bent everyone to Washington's whims
Airplane manifests say much about what presidents are thinking when visiting a nation. Lots of business titans on board means one set of priorities; loads of national-security or human-rights types portend others.
In the case of Donald Trump’s arrival in Beijing on Wednesday, the tell is who’s not on Air Force One: China-bashing advisor Peter Navarro.
It’s long been disturbing that an economist famed for a documentary titled “Death by China” has US President Trump’s ear on America’s most important economic relationship. Navarro and his trade-war-drum schtick being left behind suggests a measure of realpolitik has seeped into the Trump policy bubble.
It probably won’t last, though. Navarro’s policy prescriptions may be back in favor once the negotiator-in-chief returns to Washington largely empty-handed and bombarded anew by swirling scandals.
Trump’s sales pitch was doing for Americans what the “Art of the Deal” guru did for Trump International. One year on, he has zero legislative wins and a tax cut plan that limped across the starting line. Nor are efforts to pull a Ferdinand Marcos and put political enemies in jail working out. Trump’s base wants him to return from his Asia jaunt with a slew of job-creating deals.
That didn’t happen in Japan, despite Trump’s hot bromance with Prime Minister Shinzo Abe. It’s even less likely in Moon Jae-in’s South Korea. And it doesn’t seem to be on the cards with China’s Xi Jinping, who’s already positioning his economy for the years after Trump vacates the Oval Office.
Odds are, frustration will lead Trump back to Navarro’s zero-sum worldview of 45% tariffs. Abe is demurring on Trump’s bilateral trade push, while Moon isn’t proving the pushover Trump hoped. Trump’s claims that he and Xi enjoy the “best relationship of any president-president” look hollow as China goes its own way on North Korea.
At every failed legislative turn, Trump resorts to executive actions that make headlines and remind everyone who’s boss. Irked that Xi isn’t falling into line, Trump may follow this pattern and move to choke the flow of Chinese goods.
That would be yet another self-inflicted wound. The first was killing the Trans-Pacific Partnership. Turning his back on history’s biggest trade pact, one incorporating 40% of world gross domestic product, was a colossal Trump gift to Xi. Another wound: reneging on the multilateral Paris climate-change deal.
China’s Asian Infrastructure Investment Bank, Belt and Road Initiative and massive investments in renewable energy, artificial intelligence and other industries of tomorrow suggest the Trump presidency is but a blip on Xi’s radar screen
Ian Bremmer of Eurasia Group isn’t trolling Trump with his “China Won” Time magazine cover story and #AmericaSecond hashtag – he’s explaining why Trump has so little leverage as he arrives in Beijing. China’s Asian Infrastructure Investment Bank, Belt and Road Initiative and massive investments in renewable energy, artificial intelligence and other industries of tomorrow suggest the Trump presidency is but a blip on Xi’s radar screen.
Sigmund Freud seemed to be in the room recently when Trump referred to Xi as “king” of China. Xi knows full well he’ll be at the helm long after Trump vacates the Oval Office, whether that’s in 2021 or sooner, given the scandals and indictments flying the way of his White House. Since Xi’s new Politburo Standing Committee contains no clear successor, there’s every reason to think he may angle to stay on beyond 2022.
Xi’s “Made in China 2025” vision is in stark contrast with Trump’s determination to drag America back to 1985. China is putting its full weight – and huge financial firepower – behind raising its technological prowess and industrial innovation. It’s promoting domestic brands, working to become a leader in green manufacturing techniques and other technologies to make China a major player in high-speed transportation, medical devices, robotics and space travel.
Trump is working to make coal great again, reversing course on free trade, cutting taxes for billionaires, freeing bankers to generate the next financial crisis, harping on about exchange rates and threatening trade wars. It’s a ploy to return to the global system that existed in 1985, back when currency tweaks and tariffs could bend everyone to Washington’s whims – and it won’t work.
So, Xi will roll out the red carpet, show Trump a good time and feign cooperation while Air Force is in Beijing. History is likely to prove, though, that it’s the calm before the trade storm to come.