Why Trump Will Lose the Trade War With China

It was only a little more than a year ago that Donald Trump said that “trade wars are good and easy to win.” As his current trade war with China seems to be hurtling the U.S. economy towards a recession, the president defended his approach by telling reporters at the G7 summit that, “It’s the way I negotiate. It’s done very well for me over the years, and it’s doing even better for the country.”

Paul Waldman is right to suggest that Trump has no idea why he’s losing the trade war.

While trade is one of only two policy issues (immigration is the other) that Trump has shown he has sincerely felt opinions about, he labors under a series of misconceptions, bred by ignorance and what appears to be a complete lack of interest in grasping how the trade war appears from China’s perspective.

Which is of course the basis of smart negotiation. You can’t get a good deal unless you understand what the person on the other side wants, needs, is willing to tolerate and can’t abide.

That is reminiscent of this quote from Sun Tzu.

If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.

One of the reasons it is important to know your enemy is that, in understanding their wants and needs, you provide yourself with opportunities to develop leverage. In any negotiation, that is the critical ingredient that is necessary for success.

At the news conference in France, Trump repeatedly mentioned that China has lost 3 million jobs as a result of the trade war. But as Waldman points out, in a country with 1.4 billion people and an unemployment rate under four percent, that isn’t enough to make a difference. In other words, it doesn’t provide the leverage Trump needs with China.

On the global stage, Trump seems determined to isolate the United States and embrace a go-it-alone approach with adversaries. That robs him of the one thing that could provide the leverage he needs to negotiate effectively with a country like China: partnership. In Trump’s delusional world, he is so exceptional that he doesn’t need anyone else, which is why he is failing on every front when it comes to foreign policy.

People on both the left and the right agree that there are many issues to be dealt with when it comes to China. Obama was attempting to set up the leverage to do so by negotiating the TPP trade agreement. As Barry Naughton wrote, it would have shifted alliances within Asia, aligning the countries involved more closely with the United States. That is why top China expert Christopher Johnson said that Trump may have committed his biggest strategic blunder vis a vis China when he pulled out of the agreement. Any leverage the U.S. would have gained by combining forces with the countries involved in TPP went down the drain.

What we see is that Trump is both ignorant and incompetent when it comes to wielding power. The idea that people or nations can work together in a way that provides leverage during negotiations is completely at odds with his pattern of threats from afar, followed by capitulation in face-to-face meetings.

In the end, China will win this trade war. At some point, that will become obvious—even to Trump. That is when the pattern Brendan Nyhan described months ago will reach its conclusion.

  1. Present distorted version of status quo: “TPP is horrible and must be abandoned.”
  2. Create crisis: “Trade wars are good and easy to win.”
  3. Restore status quo (often at substantial cost): Trump capitulates to China.
  4. Take credit for status quo: “Look at the amazing deal I made with China.”

Anyone who assumes that Trump will learn from this experience hasn’t been paying attention over the last three years. He will tout how successful he was, even as it is clear to those of us who live in the reality-based world that he failed spectacularly. The delusional edifice Trump has built around himself is specifically designed to shield him from any sliver of accountability. So he will lose and pretend he won—just like he’s been doing his entire life.

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Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly. Follow her on Twitter @Smartypants60.