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President Trump thinks he has worked out a magnificent “deal” with China. The outlines of the deal are fairly simple to understand: Trump is prepared to drop his economic grievances against China in exchange for China’s help in fixing “the North Korea problem.”
Trump is being played like a fiddle by Chinese President Xi Jinping.
North Korea has been taking an increasingly aggressive posture towards the West; in particular, it is developing intercontinental ballistic missiles which, for the first time, would give it the ability to strike the United States, not just South Korea and Japan.
While Trump used tough protectionist rhetoric in his campaign, many of his advisers are what Trump supporters would call “globalists, ” particularly his chief economic adviser and former Goldman Sachs COO, Gary Cohn. Trump almost certainly doesn’t want a trade war with China, and his protestations to the contrary are probably part of his favorite negotiating tactic, which is to start with a gigantic ask that can then be bargained down. (Many people think this is how negotiation works; in most business schools, the first thing they teach you in the first negotiation class is that it’s a terrible tactic, because the other side can see through it 99 percent of the time and it just makes you look silly. But hey, maybe it works in real estate.)
Trump’s offer to China is Bad Deal 101. Why? Because he is giving away something in exchange for nothing.
Let’s start with the “nothing” part. One of the most clichéd lines about North Korea is that the way to convince North Korea to do something is to make China do the convincing, because China is the only country with real leverage over North Korea.
