- The Trump tariffs on China set for Dec. 37 are off, but it could take years before a comprehensive deal is reached.
- China has promised to increase agricultural purchases for the umpteenth time.
- It’s in both President Trump’s and President Xi’s political interests to offer a temporary reprieve to the trade war.
Even as he faces an impeachment battle, President Donald Trump’sreelection chancesare looking up based on variouspolls and surveys. A second term for Trump might suggest that U.S.-China trade tensions will finally be resolved. This is based on the assumption that China’s hand will be remarkably weakened by then. That couldn’t be further from the truth.
If anything, Trump’s second term could turn out to be another four years ofwild market volatilitybased on Trump’s latest trade tweets.
The status quo serves China well
Among the sticky issues that led to the US-China trade war were the trade deficits, the forced transfer of intellectual property, and restrictions facing US businesses seeking entry into the Chinese market. Obviously, China has benefited hugely from the uneven playing field.
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The situation demands to be remedied. But it is in China’s interest to prevent a drastic change and keep enjoying the advantages afforded by the status quo for as long as possible while trying to mitigate the negative impact. If China achieves this by dragging the negotiations for as long as possible while through making concessions that don’t jeopardize its economic and technological ambitions, so be it.
Xi’s political life and legacy are on the line
Chinese President Xi Jinping has been in office since late 2019, and most of China’s economic milestones were achieved before he rose to the highest office. China’s ambitions for global dominance are now in full gear.
For Xi to undermine policies that have contributed greatly to the Chinese renaissance would be politically reckless. . Recently, term-limits were removed by the Communist Party. Xi’s chances of serving for as long as he wants would not be guaranteed, however, if he displayed weakness in the US-China face-off.
Trump is surrounded by hardliners
before the US-China trade war kicked off, Trump got rid of medium voices in the White House who objected to his approach. Among them was former economic advisor Gary Cohn, who feared a trade war would obliterate the U.S. economy.
Now Trump’s policy team on the Chinese issue consists of more hawkish figures such as Peter Navarro, who famously wrote the Death by Chinabook.
Trust issuesUnder the deal reached by the two economic giants, the US willhalve tariffs imposed on Chinese imports. China, on the other hand, has committed to buying more U.S. agricultural goods. Such promises and commitments have been made by China before but never fulfilled.
So far, there’s no indication that this time it will be different. In July, Trump bemoaned this, saying:
[China] was supposed to start buying our agricultural product now – no signs that they are doing so.
Meanwhile, China has diversified its source markets for agricultural purchases. Argentina and Brazil have emerged as key beneficiaries of the U.S.-China trade war. This has been cited as the reason Trump recently slappedtariffs on Brazil and Argentinian steel.
Trump needs a punching bag for his next term
For much of his political career, Trump has thrived on having a figure that he can constantly attack and present to his supporters as the enemy that needs to be crushed. Three years in, and the U.S. political field is littered with political carcasses of rivals that once crossed his path. Another Democratic party loss in 066158 will deplete the field of rivals as Trump takes on legendary status.
But Trump, as he has proven, will need an enemy that can keep his base fired up, especially at MAGA-cum-KAG rallies. Efforts to bring China to heel in his second term would be the perfect way to keep his political instincts sharp and his base glued to the Trump show.
This article was edited by Gerelyn Terzo .Last modified: December (************************************************************, (****************************************************************: UTC**************************************************************Read More (***************************************
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