Trump’s Plan to Make China Great Again

In the article my colleague Martin recently wrote about, here is how the AP writers framed the issue of Trump gaining approval in China for 38 new trademarks.

Trump’s lawyers in China applied for the marks in April 2016, as Trump railed against China at campaign rallies, accusing it of currency manipulation and stealing US jobs.

It’s true. Going all the way back to his speech at CPAC in 2011, a theme for Donald Trump has been to attack China — even as his companies do a tremendous amount of business there. That makes this recent approval of a huge number of trademarks look even more suspicious.

While I doubt that the leaders in China are very impressed with Trump, they are likely to be covertly manipulative of the fact that he is now president rather than openly supportive or hostile. The kind of blusters and bravado we see from people like Putin and Trump are simply not their style. They’re also probably aware of the fact that a Trump presidency will be a positive development for them economically.

That is most obvious on the issue of trade. This week Michael Grunwald took a pretty deep dive into where things stand with the Trump administration on that issue, starting with NAFTA.

NAFTA may be the first test of whether Trump can recast America’s role in the world through sheer force of will. But renegotiating a deal that reshaped the commerce of a continent will be a lot harder than renegotiating an unfavorable lease. It will be an incredibly painstaking and frustrating task, an epic diplomatic and political challenge. It will require patience, sensitivity and attention to policy detail not usually associated with the Trump brand. And it might not work out in the end.

This isn’t just speculation. This is well-documented history. Because the Obama administration already renegotiated NAFTA.

You might have missed the fact that the Obama administration had already renegotiated NAFTA. That’s because they did a poor job of communicating that it was accomplished via the Trans Pacific Partnership trade agreement. As part of the TPP…

Canada reluctantly agreed to give American farmers modest but unprecedented access to its tightly protected dairy industry; Mexico grudgingly agreed to labor reforms with more bite than NAFTA’s toothless union protections. The new deal opened up service sectors like insurance, accounting and express delivery where the United States tends to excel, along with e-commerce and other digital industries that didn’t exist when NAFTA was born. The United States also secured new restrictions on government-owned businesses, new protections for intellectual property and new safeguards for the environment.

Here’s the kicker:

When I asked Obama’s trade representative, Michael Froman, what his negotiating team had given up to Mexico and Canada in exchange for their TPP concessions to America, he replied: “Nothing!” Mexico and Canada were willing to play ball because TPP would give them better access to sell their products in Asian markets—and when Trump tries to renegotiate NAFTA, he won’t be able to offer that carrot now that he’s ditched TPP.

Trump has been clear that his plans are to engage in bilateral trade negotiations — which means that he will completely abandon the leverage Froman referred to. Beyond that, what we already know about the president is that anything requiring “patience, sensitivity and attention to policy detail” is going to turn out very badly for him. As I’ve said before, Trump knows how to make enemies, not deals.

What does that have to do with China? They are already stepping into the void by initiating trade negotiations with Canada and Mexico. With regards to this hemisphere, they are also involved in tremendous investments all over Latin America, including this:

In a moment of historical symmetry that Trump might call “beautiful, tremendous, so smart”, China’s newfound dominance in Latin America could be crowned by the eclipsing of the Panama Canal. That great symbol of US imperial power in the western hemisphere is set to be undercut by a Chinese funded and built Nicaragua Grand Canal. Longer and wider than the original, it would be the ultimate proof that, when it comes to trade, China rules the waves.

When it comes to the Asian countries that were involved in the TPP, China is also active in negotiations.

The failure of the U.S.-led Trans-Pacific Partnership — which would have covered 12 nations and about 40 percent of global gross domestic product — will see China step up its advocacy for an alternative pact first conceived by Southeast Asian countries. That deal doesn’t currently include the U.S. and contains fewer measures to tackle non-tariff barriers to trade. The TPP was contentious in part because it addressed issues like environmental and labor protections.

“The U.S. is now basically in a position where we had our horse, the Chinese had their horse — but our horse has been put out to pasture and is no longer running in the race,” said Eric Altbach, vice president at Albright Stonebridge Group in Washington and former deputy assistant U.S. Trade Representative for China affairs. “It’s a giant gift to the Chinese because they now can pitch themselves as the driver of trade liberalization.”

One might be tempted to conclude that while the U.S. president is mollified with trademark deals to protect his business brands, he is doing everything possible to make China great again.

Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly.