Tuesday, September 3, 2019

What did Donald Trump do today?

He tried to threaten China with even more "easy to win" trade war if he gets re-elected.

Trump tried an interesting negotiating tactic today: he tweeted that if China didn't come back to the negotiating table, and if he were re-elected in 2020, then any future "Deal" to end the trade war "would get MUCH TOUGHER!"

Trump is eager for talks to resume, in part because he was recently caught lying about a phone call that supposedly indicated the Xi government's eagerness to negotiate. No such call happened, as the Chinese government was happy to point out. Trump was apparently motivated by a desire to stop a steep slide in the stock markets with some happy, if fake, news.

Regardless, there are a few reasons why China is probably not too concerned about Trump's latest threat. For one thing, his re-election is hardly a sure thing. Trump is losing by a wide margin to all major Democratic candidates in recent polls, enough to overcome even his built-in advantage with the electoral college.

Also, Trump is failing to meet even his own standard for victory. He has repeatedly insisted that he must impose tariffs as a matter of national emergency, because otherwise it would be letting China "rape our country" by perpetrating "the greatest theft in the history of the world."

In reality, a trade deficit is a sign that a country has money to spend on foreign goods. China isn't "raping" Americans so much as providing goods in exchange for money. But even by Trump's absurd standard, the trade deficit is skyrocketing under Trump, as Axios noted today:

Figures for the first half of 2019 are even worse, according to Trump's understanding of things.

Of course, it's true that tariffs are hurting China. By increasing the taxes that American consumers pay on Chinese goods in the form of higher prices, demand for those goods is reduced. But retaliatory tariffs—something Trump seems unwilling to believe is possible, no matter how many times it happens—have devastated whole sectors of the U.S. economy and slowed economic growth to a crawl.

Another way of interpreting Trump's threat is that he expects the trade war to drag on through the end of his term. When he started imposing tariffs on most of the United States' major trading partners back in March of 2018, he said that trade wars were "easy to win."

So what?

  • It's a bad idea to let your opponents in a negotiation know you're insecure about your position.
  • The economic security of the United States is more important than Trump's political future.
  • This isn't one of those things a president can afford to be this incompetent at.