As we learned during the House impeachment hearings, EU Ambassador Gordon Sondland told David Holmes that “the president doesn’t give a sh*t about Ukraine” and only cares about the “big stuff.” When asked to clarify, Sondland said that he meant “big stuff that benefits the President.” In other words, what drives this president are his own self-interests.
At this moment, Trump’s self-interests are defined by two things: (1) avoiding removal from office by the Senate, and (2) winning re-election in 2020. One of the things that hinders his second goal is the fact that many of his supporters have been suffering financially from his trade war with China. While he had once tweeted that trade wars are good and easy to win, he was failing miserably on that front.
Many of us have noticed the pattern of what Trump does in those circumstances. The process was summarized perfectly by Brendan Nyhan.
- Present distorted version of the status quo.
- Create crisis over distorted version of the status quo.
- Restore status quo (often at substantial cost).
- Take credit for status quo.
After igniting a trade war with China, the president moved to steps three and four on Wednesday by signing a Phase One trade agreement. But as Martha White writes, it “is notable not for what it includes, but for what it omits.” Here is a summary of what is, and is not, included.
The agreement focuses heavily on a commitment by China for purchases of $200 billion worth of U.S. farm products and other exports…
“It doesn’t so far include anything that is related to the entire issues surrounding Huawei, 5G, export controls, or a host of new technologies,” said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics. “More importantly, there is nothing here concerning Chinese subsidies and I think that, in many ways, is the big omission,” he said. “If you’re worried about China as a long-term tech competitor, then clearly the logic of that argument rests with the fact that the Chinese are quote-unquote rigging the system through state-owned subsidies.”…
Although the White House agreed to cancel a 15 percent tariff on a wide-ranging tranche of consumer goods that had been scheduled to go into effect last month, and tariffs were lowered on $120 billion worth of Chinese goods from 15 percent to 7.5 percent, the deal still leaves 25 percent tariffs on $250 billion of Chinese imports.
As Jen Kirby explained, this is more of a truce than a trade agreement.
“I wouldn’t call this a trade agreement,” Marc Busch, a professor of international business diplomacy at Georgetown University, told me. “It’s more a cessation of hostilities, phase one, coupled with some barter.”…
“Phase one, and done” is a phrase that’s going around, said Brad Setser, a senior fellow for international economics at the Council on Foreign Relations and former US Treasury official. “It’s hard to see how you get to a phase two,” he told me…
Trump’s trade deal, then, is more of a trade truce between the world’s two biggest economies, which is good for the US, China, and the rest of the world.
So there you have it: a trade war truce, which Trump claims is a “historic” deal.
This president put American farmers through hell over the last couple of years and then sold them out for a cheap truce, all so that he could have an accomplishment to brag about on the campaign trail.