Trump's crossroads: re-election or trade agreement with China?

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The speech by President Donald Trump showed that the negotiations seem to have paid off, but he reiterated his protectionist line

Trump's crossroads: re-election or trade agreement with China?

The speech by the State of the Union, delivered by President Donald Trump amid a political conjuncture of conflict with the Democrats, with China and with Venezuela, made clear the objectives of the White House for any agreement reached between the United States and China about the commercial war.

Leer en español: La encrucijada de Trump: ¿reelección o acuerdo comercial con China?

Trump was emphatic with the objective of the negotiations, which have been happening in confidence for a few weeks now. "End unfair business practices, reduce our chronic trade deficit and protect American jobs," the president said.

Although his statements showed, in large part, a cooperative attitude, at no time did he demonstrate the will to give in: a hard line permeated the whole speech.

"We are making it clear to China that after years of targeting our industries and stealing our intellectual property, the theft of American jobs and wealth has come to an end," Trump said, noting that he has "great respect" towards Chinese President Xi Jinping.

Despite this, he reiterated that the negotiations would continue, and that an agreement would be sought. "At this moment we are working on a new trade agreement with China. This must include a real structural change", said Trump.

Crossed interests could avoid agreement

For Trump's electoral base, the fact that these statements have found a place in the speech must have been a real taste. Trump's continued support for the middle classes in the center of the country, whose jobs in the industry are threatened by China, surely confirms that he is a candidate who looks after his interests. At a time when Trump's career is heating up for re-election, securing the support of his base should be a priority.

But he has to be carefull, because his eagerness to please this electoral group can stall the negotiations and cause a traffic jam. This would be a problematic jam, as the trade war has already caused another important source of support for Trump, the farmers, to go to protest to Washington. Agricultural income has fallen to its lowest point in 15 years, as reported by the South China Morning Post, because they have lost the export destination that China represents.

Read also: A new chapter in the US war against Huawei

The hard line, not to give in, may benefit Trump in favor of the middle class away from the main cities, but it will complicate and extend the negotiation. China has bargaining power, not only through the pressure exerted by the agricultural lobby in the capitol, but also by countless American manufacturers who suffer from the absence of cheap inputs from this country.

This strategy can work in front of the microphone, it can resonate with your audience and can give you something to talk about, but it does little to lubricate the negotiations and help resolve them. Any agreement signed will imply that the United States will give at least one of its petitions, China will not accept an agreement that would harm it or make it impossible to continue with its healthy trade surplus.

Having clear priorities will be critical to the Trump administration. If the list is headed by the electoral race, the road will be difficult, since it will have to reconcile the interests of the industrial employees with that of the farmers.

If  his interest is, as he says in the speech, to reach a beneficial agreement for the United States, he should limit his expectations. To reach a beneficial agreement, an agreement must first be reached, and China has reasons to force it to give way.


LatinAmerican Post | Pedro Bernal

Translated from "La encrucijada de Trump: ¿reelección o acuerdo comercial con China?"