Trump is new wild card in trade
TRUMP PREPS TO HOST CHINA PRESIDENT JINPING
For years, at leadership summits and global conferences, the United States pushed a reluctant China to open its markets and embrace free trade.
Now, as President Donald Trump prepares to host his Chinese counterpart, Xi Jinping, at Mar-a-Lago in Florida, a reversal of sorts has emerged: It’s the U.S. leader who is seen as an unpredictable wild card and a skeptic of free-trade deals — And it’s China that is casting itself as a champion of rulesbased global trade.
At the heart of the shift is an unconventional president who is overturning expectations of what the United States wants, what it says and how it behaves on a global stage.
At an annual gathering of global elites this year in Davos, Switzerland, Xi gave a speech extolling free trade. And when the United States abandoned an Asia-Pacific free-trade pact in January, China intensified efforts to persuade countries to join its version of a regional trade accord.
Trump, by contrast, has rejected any notion that free trade can work unless he adopts a more combative stance than his predecessors in the White House did. On Twitter last week, Trump predicted that the meetings today and Friday could be “very difficult.” And he warned that America’s vast trade deficit in goods with China — $347 billion last year, nearly half the total U.S. trade gap in goods — was unacceptable.
“President Trump campaigned on addressing trade deficits and unfair Chinese trade practices, and China is clearly in his sights,” says Myron Brilliant, head of international affairs at the U.S. Chamber of Commerce.
On the campaign trail, Trump threatened to impose a 45 per cent tariff on Chinese imports as punishment for what he called abusive trade practices. China hinted that it would retaliate by restricting sales of U.S. goods.
How the U.S. and China settle their differences over trade will have global repercussions. A trade war between the world’s two biggest economies — together they account for nearly 40 per cent of the world’s economic output — could damage commerce and slow growth.
Most analysts aren’t expecting fireworks — or breakthroughs — from the Mar-a-Lago summit, Trump’s warnings notwithstanding. Trump’s “tweet is trying to set low expectations,” says David Dollar, a former official with the U.S. Treasury Department and the World Bank and now senior fellow at the Brookings Institution. “I don’t think there’s any chance of a big breakthrough.”
“This is mainly a chemistry meeting,” says Nathan Sheets, a Treasury official in the Obama administration and now a visiting fellow at the Peterson Institute for International Economics.