Based on recent interviews, the U. S. president believes his tariffs have no downside. That should worry China.<\/b>
\nOn Saturday, December 1, Chinese President Xi Jinping and U. S. President Donald Trump will meet on the sidelines of the G-20 summit in Argentina. The world will be watching to see if the two leaders come away with a breakthrough to end their escalating trade war, which has seen the United States slap tariffs on $250 billion worth of Chinese goods, with Beijing responding in kind.
No less a figure than Larry Kudlow, the director of the White House\u2019s National Economic Council, emphasized the importance of the discussions on November 27. \u201cThis is an opportunity, with the two presidents, to break through what have been disappointing discussions,\u201d Kudlow said, according to Politico . \u201c[\u2026]This is a big deal, this meeting. And the stakes are very high.\u201d
But after a brief spell of optimism, stemming from a Trump-Xi phone call in early November and the original announcement of their summit, pessimism is creeping back in. The most recent round of hand-wringing stems from comments made by Trump himself, which seem to throw cold water on a possible breakthrough.
Trump spoke to Wall Street Journal reporter Bob Davis earlier this week about U. S.-China trade relations, tariffs, and the possibility of a deal. In that interview, Trump set a high bar for a potential deal with China \u2013\u00a0a standard\u00a0that is likely a nonstarter\u00a0for Xi and the Chinese government.
\u201cThe only deal that would really be acceptable to me \u2013 other than obviously we have to do something on the theft of intellectual property, right \u2013 but the only deal would be China has to open up their country to competition from the United States,\u201d Trump said.
When Davis pushed further, asking if Trump was willing to suspend a scheduled increase\u00a0in the tariff rate set for January 1, the president\u2019s answer was not encouraging: \u201cI think it would be highly unlikely.\u201d
Trump did add, later in the interview, \u201cHere\u2019s the bottom line: We\u2019re going to make a great deal with China. And everybody hopefully will be very happy, including China.\u201d But based on the tenor of the previous remarks, that comment seemed more geared to an eventual, hypothetical future, not a prediction pegged to the G-20 meeting.
Perhaps most concerning for China, Trump seems to be of the opinion that the current tariffs are cost-free for the United States. All of the worrying predictions of negative effects, he claimed, \u201chave turned out to be false\u2026 we\u2019re taking in billions of dollars. We\u2019re creating tremendous numbers of jobs.\u201d
\u201cI am very happy with what\u2019s going on right now,\u201d the U. S. president declared, referring to the current tariff situation. \u201c[\u2026]We have money that is pouring into our treasury right now, and on January 1 it\u2019ll become much more so.\u201d
And, according to Trump, \u201cthe brunt of it is being paid by China.\u201d
That fits in with comments Trump made in a separate interview with the Washington Post. In that interview, he suggested, as he has previously, that China is desperate to make a deal while the United States has little incentive to do so: \u201cI think that China wants to make a deal very badly. I think we\u2019ll either make a deal or we\u2019ll be taking in billions and billions of dollars a month in tariffs, and I\u2019m okay with either one of those two situations.\u201d
Or, as Trump put it in his WSJ interview, \u201cThey have to open up China to the United States. Otherwise, I don\u2019t see a deal being made. And if it\u2019s not made, we will be taking in billions and billions of dollars.\u201d
In Trump\u2019s mind, then, the trade war is a no-lose proposition for the United States: either China gives in and Washington gets a \u201cgreat deal,\u201d or tariffs continue and the United States benefits from the extra revenue and adds new jobs. In Trump\u2019s public comments, at least, there is no room for the possibility that the tariffs will also damage the U. S. economy, although that is the consensus of most experts .
Trump\u2019s mental framing puts the onus entirely on China to offer concessions to end the trade war \u2013 something that is very unlikely to happen. For one thing, China is not keen to upend its entire government-centered development strategy simply to please Trump. And on a more symbolic level, Xi \u2013 who had repeatedly promise to oversee the \u201cgreat rejuvenation of the Chinese nation\u201d \u2013 cannot be seen as capitulating to U. S. demands.
When asked about Trump\u2019s comments, Chinese Foreign Ministry spokesperson Geng Shuang reminded reporters that Trump and Xi had previously agreed \u201cto seek a solution which is acceptable to both sides\u00a0on the trade issues.\u201d
\u201cThe China-U. S. summit is\u00a0just around the corner,\u201d Geng said. \u201cWe hope that the U. S. can meet China halfway and\u00a0follow the consensus\u00a0reached by the two leaders at the telephone conversation to strive for positive outcomes of this summit.\u201d
With a president as mercurial as Trump, nothing is impossible. But Trump\u2019s own comments leave little hope for \u201cpositive outcomes\u201d on December 1.<\/p>\n