ZTE puts Trump’s economic ADHD on full display
Trumponomics has turned into an intellectual muddle of impulsivity, contradiction and confusion
Donald Trump’s perplexing U-turn on China’s ZTE Corp is not an example of his “art of the deal.” It showcases his ADHD – attention deficit hyperactivity disorder – presidency, one that’s reverberating around Asia.
The @realdonaldtrump Twitter feed has attention deficit hyperactivity disorder written all over it, of course. But the US leader’s supposed realpolitik on ZTE puts the problem in stark relief.
First, his White House slapped penalties on the Chinese juggernaut over its trade with Iran, including a seven-year ban on US tech firms from selling to the smartphone maker. Now, Trump wants Commerce Secretary Wilbur Ross to give ZTE a way out – or, as Trump tweeted, give it “a way to get back into business, fast.”
Yet there’s no way back from the realization that Trumponomics is an intellectual muddle of impulsivity, contradiction and confusion.
Most pundits assume that ZTE is Trump’s way of winning Xi Jinping’s favor ahead of trade talks and Trump’s meeting with North Korean leader Kim Jong-un. The trouble is, the about-face on ZTE amounts to low-cost tinkering, not a game changer.
Or as analyst Paul Triolo and his colleagues at Eurasia Group put it: “The action does not indicate that Trump will back down on tariffs against China, but he will make the decision to impose tariffs himself and choose a time that he feels is right.”
This ADHD segue, Eurasia says, is about “short-term goodwill” ahead of this week’s Washington visit by Liu He, China’s vice-premier. It’s also about hopes Beijing will approve Qualcomm’s pending acquisition of NXP Semiconductors.
But nothing here fixes the underlying problem: Trump’s overly simplistic view that American prosperity relies on wrestling jobs back from China.
Xi’s China, as this column has argued before, is investing hundreds of billions of dollars preparing for the world it will confront in 2025, and beyond. Trump’s strategy rests on dragging America back to the economic system that prevailed in the 1980s.
That’s impossible, of course, if for no other reason than China’s rapid rise. It fits with Trump’s policy ADHD, though. That strategy not only has this White House firing in all directions, but handing out gifts that won’t pay off – all just to change the subject in the short run.
One could argue as much about Trump’s planned summit with Kim in Singapore next month. Even before Pyongyang takes clear and verifiable steps to denuclearize, Trump will reward it with the photo-op the Kim dynasty has long coveted. Ditto for moving America’s embassy to Jerusalem – giving the Israelis an amazing gift for nothing in return.
Trump’s ZTE ploy is a piece of this corrosive pattern. His negotiating tactic has thrown White House strategy into complete turmoil. At the same time, Trump gives ZTE a pass on trading with Iran, National Security Advisor John Bolton is threatening European firms against the same practice. Huh? And, of course, there’s Trump tearing up the Iran nuclear deal, while hoping Kim would agree to a similar framework.
Besides, Trump’s ZTE gamble won’t even eke out modest returns. Ultimately, say analysts at BMI Research, “we believe that China is unlikely to cede to the US’ demand of stopping subsidies into industries targeted by the Made In China 2025 plan.” Most likely, they argue, “both governments will continuously seek protection of its local technology industries to control its respective lead in disruptive technologies.”
Nothing Trump is doing with ZTE, whatever that might end up being, changes the fact that China’s economy is destined to dwarf America’s. It doesn’t thwart China’s designs on building a bigger, better Silicon Valley that dominates the software, renewable-energy and robotics industries of tomorrow, while Trump brawls with Amazon.com and makes coal great again. Nor does it change the sad fact Trump’s White House is more focused on fending off the future than thriving in it.
Attention is everything in such a dynamic global economy. Too bad Trump’s is all over the place.