China would be unwise to try and wait out Trump
If the Chinese government saw last week’s debate among Democratic Party candidates for the 2020 US presidential nomination, it should want to sign a trade deal with President Donald Trump — and quickly. China should not try and wait for a Democrat president. For almost three hours, each of the 10 leading candidates tried to prove he or she was more progressive than the others. Each candidate was eager to demonstrate an ability to take on and oppose Trump on almost every policy issue. There was one exception: Trade talks with China.
Given multiple opportunities, none of the candidates were willing to oppose the billions of dollars-worth of tariffs Trump has imposed or is planning to impose on China. The candidates offered criticism of Trump’s negotiation style, which they frequently referred to as “erratic.” Yet, when asked repeatedly, none of the candidates would say that he or she would end the tariffs as president. In fact, Sen. Kamala Harris seemed to indicate that it would be a good idea to impose even more tariffs on China for reasons other than trade negotiations, such as to punish Beijing for environmental degradation. The candidates attacked Trump on his
temperament and what they described as indecisiveness in negotiating. Trump himself has explained multiple times that he negotiates by taking a very tough stance to start and then alternately giving and demanding as the negotiations proceed. He is very transparent about that. The Democrats deemed Trump’s changing stances on certain tariffs as indecisiveness.
Just last week, Trump delayed a huge set of tariffs from Oct. 1 to Oct. 15 due to China celebrating its 70th anniversary on the former date. It seems China was pleased with Trump’s gesture because, just a couple of days later, it announced it would be exempting US-produced pork and soybeans from the latest rounds of tariffs. China relies heavily on US farm goods to feed its near-1.5 billion population. This news is particularly important for the US, as farmers feared a decrease in customers and prices. It is also good news for Trump politically because he will need support from those farmers in the 2020 election.
Last week was an example of Trump’s tactics working. He decreased tensions with China by making a generous gesture before China’s national celebration. In response, China relaxed its stance, which was a huge help to the US and to Trump. Now the two sides are back on track for negotiations.
However, the Democrats spoke at the debate about being even harsher on China. Clearly, imposing tariffs against China is a popular policy among US voters, and why wouldn’t it be? After all, Beijing has engaged in currency devaluation, intellectual property theft and unfair trade practices for years. China is also a major supplier of fentanyl and the ingredients of fentanyl, which kills tens of thousands of Americans every year. The debate last week should make it clear to everyone — including China — that the Democrats also intend to take a hard stance against Beijing. That is the one policy on which they could not oppose the president because it is just too popular, even among Democrats.
When Chinese officials heard the Democrats’ answers about tariffs last week, they should have realized that, while Trump may drive a hard bargain, he is willing to give and take in negotiations. The Democrat candidates made it clear that they intend to only take in negotiations with China. Therefore, Beijing should now discard any hope it might have to wait out the Trump presidency. Now it is time for China to negotiate in good faith — for its own sake. There is another reason that China should fear a Democrat presidency: It is typically the world’s largest importer of oil. It produces almost none itself and imports millions of barrels per day, mostly from Saudi Arabia and Russia. Thus, it is highly dependent on a low oil price to keep its economy healthy. However, the Democratic candidates are proposing policies and actions that would drastically raise the price of oil.
Almost every major Democrat candidate has called for an outright ban or serious curtailment of large segments of the US oil production industry. Sens. Harris, Bernie Sanders and Elizabeth Warren have all said they would work to ban fracking. Others want to stop new wells. Some want to end offshore drilling. These policies would lead to a drop in global oil supplies and higher oil prices. While that would be good for oil-producing countries like Saudi Arabia, the UAE and Russia, it would be disastrous for China. Chinese leaders are probably annoyed that Trump was ever elected because he started this trade dispute. However, they may want to look carefully at his opponents before they hope for someone different in the White House. For China, Trump may be better than the alternative. It’s time to make a trade deal.