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Xi Jinping will Give Donald Trump a Victory on Trade

Expect Trump to declare a “triumph” in a great trade deal that will feature China’s purchase of more than a trillion dollars of additional U.S. products.

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Via The National Interest


With the conclusion of the first round of negotiations yesterday in Beijing, the way ahead for the United States and China to avoid a full-scale tariff war has become clear. With fifty days remaining before the March 1 end of the truce Trump and Xi announced to prevent U.S. tariffs increasing from 10 to 25 percent on $200 billion of Chinese imports, negotiations are likely to continue until the deadline. But before March 1, Trump will declare “victory” in this phase of the trade war—extending the truce for another six months in which a second phase of negotiations will address even more contentious issues.

My assessment is based on my analysis of the economic and political challenges that Trump and Xi are currently confronting. It is also informed by conversations with key members of Chinese president Xi Jinping’s team during a recent visit to Beijing.

In watching Beijing, it’s more instructive to think of it as a corporation than a government. Each December the CEO and his team set objectives for the year to come. Like the leadership of Apple or Amazon, they assess the “headwinds,” including signs of slowdown in the Chinese economy, projections of flagging global economic growth, and uncertainties about the trade war. On that basis they make decisions about how they are going to deliver the growth they have promised shareholders—in China’s case: 6.5 percent.

In a series of closed-door meetings in December, Xi explained to key members of his team that sustaining current levels of economic growth will require “painful choices” and offered them clues about what those were likely to be. On December 18, celebrating the fortieth anniversary of China’s opening to the world, Xi reminded his 1.4 billion fellow citizens—shareholders—that over those four decades, their Party-led government has delivered economic growth of 10 percent a year.

But his speech also struck an odd note when he declared boldly that “there is no great master who can dictate to the Chinese people.” My response was: say what? But as knowledgeable Chinese colleagues explained, this is how he is framing the deal he knows critics will say concedes too much to the Americans—insisting that as master of its own destiny, China is making these changes for the benefit of China.

The most frequent question Beijing policymakers asked me is whether the current U.S. government can take yes for an answer. In an earlier round of negotiations, Secretary of the Treasury Mnuchin and Chinese vice premier Liu He reached an agreement that would have reduced the bilateral trade imbalance by $70 billion in 2019. Both left the bargaining table thinking they were done. But then other members of the Trump team—specifically Trade Representative Lighthizer and White House Assistant Peter Navarro—scuppered the agreement.

In current negotiations, Lighthizer has the lead. The Chinese have studied his successful negotiation of the new NAFTA mere months ago. They see the differences between the old NAFTA and the new agreement as plus or minus 10 to 15 percent. If all it takes to transform what Trump called the “worst trade deal ever made” into a “great deal” is to allow Trump to make it so, then Xi will be happy to play along. As a Chinese friend noted, China was practicing ritualistic hypocrisy long before Columbus discovered America.

Chinese negotiators have dissected the White House summary of what Trump and Xi agreed to at the G20 meeting when announcing the truce. It promised to shrink the bilateral trade deficit, reduce Chinese non-tariff barriers, provide American companies a larger share in key Chinese markets, and constrain theft and forced transfer of intellectual property. But on the much more difficult issue of industrial policy and the role of the government in the Chinese economy, it was instructively silent.

The Chinese team has also noted Trump’s hypersensitivity to the U.S. stock market, which he seems to regard as a virtual political EKG. With the prospect of a wider trade war rattling American markets, which have since October fallen near bear levels, Chinese leaders know that Trump will be entangled in a life-or-death struggle with the Democratic leadership of the House. They calculate that he will do whatever is required to avoid a sharp fall in U.S. markets that could push the United States into recession—and ensure his defeat in the 2020 election.

Thus, before March 1 expect Trump to declare a “triumph” in a great trade deal that will feature China’s purchase of more than a trillion dollars of additional U.S. products. In addition to purchases of additional U.S. gas, oil, and agricultural produces, expect the agreement to include targets for increases in American companies’ share of banking, insurance, and equity markets. Since American producers account for 6 percent of China’s current gas imports, 3 percent of its oil imports, and 14 percent of its agricultural imports, and Chinese companies control 98 percent of its banking market, 95 percent of the equity business, and 91 percent of insurance, all this should not be that hard. Phase two of the negotiations will then struggle with the more difficult issues of protection of intellectual property and industrial policy.

On the larger geopolitical chessboard, the tariff conflict is relatively small potatoes. The terms on which it is settled, or postponed, will not significantly affect the trajectory of the Thucydidean rivalry between a rising China and a ruling United States. Even if China were to concede on every item on the Trump team’s wish list, China’s economy will likely continue growing at more than twice the rate of the United States. The consequences of an agreement (or postponement) for U.S. markets and the president’s political prospects are another matter.

Yogi Berra cautioned against making predictions—“especially about the future.” Nonetheless, if placing my bet today, I make the odds of a “great deal” as more likely than not.

Graham Allison is the author of nine books, most recently Destined for War: Can America and China Escape Thucydides’s Trap? . He is presently the Douglas Dillon Professor of Government at the Harvard Kennedy School.

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Cloak And DaggerLouis RobertRegula Recent comment authors
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Regula
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Regula

One can always stop the existing trades, then negotiate to reinstate them and call it a great victory. Trump wants China to give up Made in China 2025. And the Chinese tactfully stopped referring to it, calling it instead of the urgent need to improve the quality of Chinese products. That is of course the same by another name and there will be no amount of negotiation to get China to forfeit its technological development to reach breakthrough, which in the case of Huawei, ZTE and Chinese space research is already happening. Nor will China stop “subsidizing” -which means financing… Read more »

Cloak And Dagger
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Cloak And Dagger

Excellent analysis, and i concur.

Louis Robert
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Louis Robert

“… before March 1 expect Trump to declare a “triumph” in a great trade deal… if placing my bet today, I make the odds of a “great deal” as more likely than not”? * China may very well let Trump declare he has triumphed as the “world’s top negotiator” he believes he is, against it… Personally, I bet that as in judo, for instance, that will then be a case of Tomoe-Nage, i.e. of China winning by surrendering. In that case, millenary China will not need to “declare a triumph”: having watched closely, the world will just know it did.… Read more »

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EU leaders dictate Brexit terms to Theresa May (Video)

The Duran Quick Take: Episode 115.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss how EU leaders have agreed on a plan to delay the the Article 50 process which effectively postpones Brexit beyond the 29 March deadline.

The UK will now be offered a delay until the 22nd of May, only if MPs approve Theresa May’s withdrawal deal next week. If MPs do not approve May’s negotiated deal, then the EU will support a short delay until the 12th of April, allowing the UK extra time to get the deal passed or to “indicate a way forward”.

UK PM Theresa May said there was now a “clear choice” facing MPs, who could vote for a third time on her deal next week.

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Theresa May outlines four Brexit options, via Politico

In a letter to MPs, U.K. Prime Minister Theresa May set out the four options she believes the country has in light of Thursday’s decision by EU leaders to extend the Brexit deadline beyond next Friday.

The U.K. is faced with a four-way choice, May wrote late Friday.

The government could revoke Article 50 — which May called a betrayal of the Brexit vote; leave without a deal on April 12; pass her deal in a vote next week; or, “if it appears that there is not sufficient support” for a vote on her deal in parliament next week or if it is rejected for a third time, she could ask for an extension beyond April 12.

But this would require for the U.K. taking part in European elections in May, which the prime minister said “would be wrong.”

May wrote that she’s hoping for the deal to pass, allowing the U.K. to leave the EU “in an orderly way,” adding “I still believe there is a majority in the House for that course of action.”

“I hope we can all agree that we are now at the moment of decision,” she wrote.

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US media suffers panic attack after Mueller fails to deliver on much-anticipated Trump indictment

Internet mogul Kim Dotcom said it all: “Mueller – The name that ended all mainstream media credibility.”

RT

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Important pundits and news networks have served up an impressive display of denials, evasions and on-air strokes after learning that Robert Mueller has ended his probe without issuing a single collusion-related indictment.

The Special Counsel delivered his final report to Attorney General William Barr for review on Friday, with the Justice Department confirming that there will be no further indictments related to the probe. The news dealt a devastating blow to the sensational prophesies of journalists, analysts and entire news networks, who for nearly two years reported ad nauseam that President Donald Trump and his inner circle were just days away from being carted off to prison for conspiring with the Kremlin to interfere in the 2016 presidential election.

Showing true integrity, journalists and television anchors took to Twitter and the airwaves on Friday night to acknowledge that the media severely misreported Donald Trump’s alleged ties to Russia, as well as what Mueller’s probe was likely to find. They are, after all, true professionals.

“How could they let Trump off the hook?” an inconsolable Chris Matthews asked NBC reporter Ken Dilanian during a segment on CNN’s ‘Hardball’.

Dilanian tried to comfort the CNN host with some of his signature NBC punditry.

“My only conclusion is that the president transmitted to Mueller that he would take the Fifth. He would never talk to him and therefore, Mueller decided it wasn’t worth the subpoena fight,” he expertly mused.

Actually, there were several Serious Journalists who used their unsurpassed analytical abilities to conjure up a reason why Mueller didn’t throw the book at Trump, even though the president is clearly a Putin puppet.

“It’s certainly possible that Trump may emerge from this better than many anticipated. However! Consensus has been that Mueller would follow DOJ rules and not indict a sitting president. I.e. it’s also possible his report could be very bad for Trump, despite ‘no more indictments,'” concluded Mark Follman, national affairs editor at Mother Jones, who presumably, and very sadly, was not being facetious.

Revered news organs were quick to artfully modify their expectations regarding Mueller’s findings.

“What is collusion and why is Robert Mueller unlikely to mention it in his report on Trump and Russia?” a Newsweek headline asked following Friday’s tragic announcement.

Three months earlier, Newsweek had meticulously documented all the terrible “collusion” committed by Donald Trump and his inner circle.

But perhaps the most sobering reactions to the no-indictment news came from those who seemed completely unfazed by the fact that Mueller’s investigation, aimed at uncovering a criminal conspiracy between Trump and the Kremlin, ended without digging up a single case of “collusion.”

The denials, evasions and bizarre hot takes are made even more poignant by the fact that just days ago, there was still serious talk about Trump’s entire family being hauled off to prison.

“You can’t blame MSNBC viewers for being confused. They largely kept dissenters from their Trump/Russia spy tale off the air for 2 years. As recently as 2 weeks ago, they had @JohnBrennan strongly suggesting Mueller would indict Trump family members on collusion as his last act,” journalist Glenn Greenwald tweeted.

While the Mueller report has yet to be released to the public, the lack of indictments makes it clear that whatever was found, nothing came close to the vast criminal conspiracy alleged by virtually the entire American media establishment.

“You have been lied to for 2 years by the MSM. No Russian collusion by Trump or anyone else. Who lied? Head of the CIA, NSA,FBI,DOJ, every pundit every anchor. All lies,” wrote conservative activist Chuck Woolery.

Internet mogul Kim Dotcom was more blunt, but said it all: “Mueller – The name that ended all mainstream media credibility.”

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Canadian Lawmaker Accuses Trudeau Of Being A “Fake Feminist” (Video)

Rempel segued to Trudeau’s push to quash an investigation into allegations that he once groped a young journalist early in his political career

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Via Zerohedge

Canada’s feminist-in-chief Justin Trudeau wants to support and empower women…but his support stops at the point where said women start creating problems for his political agenda.

That was the criticism levied against the prime minister on Friday by a conservative lawmaker, who took the PM to task for “muzzling strong, principled women” during a debate in the House of Commons.

“He asked for strong women, and this is what they look like!” said conservative MP Michelle Rempel, referring to the former justice minister and attorney general Jody Wilson-Raybould, who has accused Trudeau and his cronies of pushing her out of the cabinet after she refused to grant a deferred prosecution agreement to a Quebec-based engineering firm.

She then accused Trudeau of being a “fake feminist”.

“That’s not what a feminist looks like…Every day that he refuses to allow the attorney general to testify and tell her story is another day he’s a fake feminist!”

Trudeau was so taken aback by Rempel’s tirade, that he apparently forgot which language he should respond in.

But Rempel wasn’t finished. She then segued to Trudeau’s push to quash an investigation into allegations that he once groped a young journalist early in his political career. This from a man who once objected to the continued use of the word “mankind” (suggesting we use “peoplekind” instead).

The conservative opposition then tried to summon Wilson-Raybould to appear before the Commons for another hearing (during her last appearance, she shared her account of how the PM and employees in the PM’s office and privy council barraged her with demands that she quash the government’s pursuit of SNC-Lavalin over charges that the firm bribed Libyan government officials). Wilson-Raybould left the Trudeau cabinet after she was abruptly moved to a different ministerial post – a move that was widely seen as a demotion.

Trudeau has acknowledged that he put in a good word on the firm’s behalf with Wilson-Raybould, but insists that he always maintained the final decision on the case was hers and hers alone.

Fortunately for Canadians who agree with Rempel, it’s very possible that Trudeau – who has so far resisted calls to resign – won’t be in power much longer, as the scandal has cost Trudeau’s liberals the lead in the polls for the October election.

 

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