Monday, September 23, 2019

What did Donald Trump do today?

He was surprised to learn how trade negotiations with China are going.

Trump has been visibly distracted in the past week by the ever-worsening whistleblower scandal (and by golf). This may explain why he was unaware of what his own staff was doing in the latest round of trade negotiations with China.

Appearing at a meeting of the UN General Assembly in New York, Trump was asked why a Chinese trade delegation had canceled a planned trip to tour American farms. This was a significant event: American financial markets, which have been watching the trade war for any sign it might be resolved, dropped sharply on Friday. 

Trump was visibly surprised to learn from his Treasury Secretary, Steven Mnuchin, that (at least in Mnuchin's telling) cancelling the visit had been the Trump administration's doing.

Video of the exchange makes clear Trump's surprise and annoyance. There's no way to know whether he'd been told about this and forgot, or whether his staff acted without telling him.
Q Mr. President, the Chinese delayed a trade delegation visit of farming communities, I believe in Nebraska and another state. Can you comment on that and whether you see that as a good sign, bad sign, neither? 
TRUMP: Well, they’re starting to buy a lot of our ag product. But, Steve, could you maybe — 
SECRETARY MNUCHIN: That was actually at our request they delayed that. So, we didn’t want there to be any confusion. They have started buying agriculture. They’re going to reschedule that at a different time. The timing didn’t work. But that was — that was purely at our request. 
TRUMP: Why was that our request? Just out of curiosity. 
SECRETARY MNUCHIN: We didn’t want confusion around the trade issues. 
TRUMP: Yeah, but I want them to buy farm products. 
SECRETARY MNUCHIN: There was no confusion. We want them to buy agriculture. They’ve committed to buy agriculture. And they’re doing that. 
TRUMP: They’ve committed to buy a lot of agriculture, and they’re going to start, and they’ve started. And we should get them over there as soon as possible so they can start buying.
In reality, China has not started buying American agricultural products, although Trump has been promising farmers that normal trade was about to resume almost since China began retaliating in the trade war he started more than a year and a half ago.

China is—or rather was—a major export market for American farmers. As a result of the Chinese retaliation against Trump's tariffs, farm bankruptcies have spiked. According to the Trump administration's own statistics, the trade war cost American farmers $12 billion in exports in 2018 alone from their high point in 2016—and China's retaliation only came in the second half of that year. Year-on-year agricultural exports to China were down 44% between early 2018 (before Trump's trade war) and early 2019.

The most likely explanation for the cancellation is that Mnuchin and other Trump administration officials who actually know what is happening with the trade war did not want to raise public hopes with footage of apparent progress.

Why does this matter?

  • Presidents should know about major events in their own supposed "negotiations" with major trade partners.
  • A president who can't focus on a major economic crisis (especially one of his own making) because he's dealing with scandals should resign.