Nations look for friendly face within Trump’s trade faction
AS THE United States challenges Europe, China, Canada, Mexico and much of the rest of the world over trade, deep factionalism within the Trump administration has flummoxed both US allies and rivals. The White House strikes a conciliatory tone one day and a militant one the next, often depending on which Trump advisers are in favour.
Increasingly, leaders in other countries are asking who is calling the shots: the globalists, the nationalists, the trade hawks or someone else?
To a degree, the mixed messages reflect the negotiating tactics of a president who likes to keep the other side off balance. Even while his team was in Beijing at the weekend, President Donald Trump, in a Twitter post, suggested a confrontational approach, calling out China over the trade imbalance. The two sides made little progress in discussions.
The inconsistency has spurred international leaders to court Trump officials they think will offer a sympathetic ear, rather than the White House as a whole – a divide-and-conquer approach that could make trade deals harder to strike. It has also eroded the belief among many leaders that the Trump administration will keep its word.
“We have to believe that at some point their common sense will prevail,” Prime Minister Justin Trudeau of Canada said in a tweet, referring to the American public, after the Trump administration’s latest move on tariffs. “But we see no sign of that in this action today by the US administration.”
Even the Chinese government, which typically couches its most aggressive statements in oblique diplomatic terms, is increasingly talking about the administration with the rhetorical equivalent of an eye roll.
“In international relations, every time you change your face and turn your back is another loss and squandering of your country’s credibility,” Chinese Foreign Ministry spokesman Hua Chunying said at a briefing in Beijing on Wednesday.
Just in the past week, US trading partners have grappled with a new wave of aggressive moves. On Thursday, in the decision that prompted Trudeau’s tweet, the Trump administration said it wouldn’t exempt Canada, Mexico or the European Union from its new steel and aluminium tariffs, after postponing the move twice.
The Trump administration has also said it would move ahead with tariffs on $50 billion in Chinese-made goods. A week before, a senior official had suggested the tariffs would be suspended.
US officials also walked back on the possibility Trump would lift crippling trade limits placed on ZTE, a Chinese telecommunications company, for violating US trade restrictions on North Korea and Iran.
Talks between the two counties in Beijing over the weekend, which were led by Commerce Secretary Wilbur Ross, ended in an impasse. The Chinese refused to commit to buying more American goods, without the US agreeing to back away from imposing further tariffs on Chinese exports.
“If the United States introduces trade measures, including an increase of tariffs, all the economic and trade outcomes negotiated by the two parties will not take effect,” China said.
Foreign negotiators are now seeking friendly faces within the White House in the hope that those people’s arguments will end up carrying the day.
Chinese officials have aggressively tried to woo Steven Mnuchin, the Treasury secretary, and Ross, say people familiar with the Chinese negotiating position, who spoke on the condition of anonymity because the talks are sensitive. Both men have extensive business and Wall Street backgrounds, and Chinese officials believe they would be receptive to arguments that China’s big trade surplus with the United States stems largely from economic factors rather than unfair trade practices.
Chinese officials have courted Mnuchin, Ross and their staff with small group meetings and conference calls, the people familiar with the Chinese position said. They have put less effort into reaching out to Robert Lighthizer, the administration’s top trade official, or Peter Navarro, a Trump adviser who cowrote a book called Death by China, to the same degree.
In essence, Chinese officials are wooing Trump administration officials they see as globalists while trying to isolate those they see as hardliners.
Conversely, European trade officials feel they have a friendlier audience in Lighthizer. They believe he has focused most of his attention on China, whose government is managing an ambitious project to build up sophisticated manufacturing and high-tech industries that could someday rival US, European and Japanese competitors. Officials in Europe believe that focus could make him more amenable to a deal to help form a united US-European front against China’s industrial ambitions.
European officials are frostier when it comes to Ross and to Trump himself, according to a senior European diplomatic official who requested anonymity because the discussions are private. They see the two as narrowly focused on getting European countries to buy more US goods over the short haul, the official said – a strategy they perceive as aimed at giving Ross and Trump photo opportunities at US steel factories.
European negotiators regard that stance as an unsophisticated, zero-sum view of trade, the official said, in which the country that sells more goods to its partner is the winner – an outlook that makes a trade deal difficult to achieve.
Even when foreign trade officials wring deals out of relationships with individual members of the administration, the agreements can quickly fall apart, as China has found.
Last year, Chinese officials presented a plan to Ross under which China would cut its voluminous steel capacity in return for avoiding proposed tariffs. Ross supported it, but it did not satisfy Trump, and the administration ended up imposing tariffs on steel imports from many countries, including China.
Then, during Trump’s visit to China in November, Ross orchestrated deals that administration officials claimed were worth $250 billion, although their true economic value was far less. The peace that effort bought didn’t last. The United States has since ramped up its criticism of China’s industrial ambitions and threatened to impose tariffs on more than $150 billion in Chinese goods.
China’s efforts to court Mnuchin have also led to frustration, despite initial signs that they would pay off.