Trade war negotiations: Trump versus Trump?

February 04, 2019 11:55
US President Donald Trump’s susceptibility to flattery, his need to be liked and his impatience for triumphant declarations may hobble his negotiators. Photo: Reuters

As China celebrates the arrival of the Year of the Pig, trade negotiators on both sides of the Pacific pause briefly before resuming talks, this time in Beijing, in an attempt to reach what President Donald Trump calls “the biggest deal ever made” to end the trade war he launched last year.

The latest round, held in Washington D.C. on Jan. 30-31, ended with both the Chinese and American sides announcing substantial progress. The details of what happened behind closed doors aren’t known, but one tool being used by both sides is clear: flattery.

At a White House meeting on Thursday, Trump praised Vice Premier Liu He, the chief Chinese negotiator, as “one of the most respected men in Asia, one of the most respected men in all of China” and “one of the most respected men anywhere in the world”.

The Chinese official in turn praised Trump for his “policies of tax reduction and deregulation” which, he said he learned from his American colleagues, had led to “high growth and low unemployment with unprecedented prosperity”.

US Trade Representative Robert Lighthizer, the chief American negotiator, injected a dose of sobriety. He said the most important issues included “the protection of US intellectual property, stopping forced technology transfer” and “enforcement, enforcement, enforcement”.

His emphasis on enforcement reflected American frustration with previous talks, when promises were made but not acted upon.

Vice Premier Liu, ever mindful of face, called for “a two-way enforcement mechanism”, highlighting reciprocity, even though the focus is largely on protection of US intellectual property and the cessation by China of forced technology transfers.

The trade war flows from what Trump said in the 2016 presidential campaign, when he accused China of “raping” the United States. Previous American leaders had objected to China’s industrial policy but none had been willing to confront China.

While Trump’s willingness to be confrontational spurs the American resolve, Trump’s susceptibility to flattery, his need to be liked and his impatience for triumphant declarations may hobble his negotiators.

During the White House meeting, a letter from President Xi Jinping was read out in which the Chinese leader dwelled on his high regard for Trump, saying he cherishes their friendship and enjoys “our meetings and phone calls in which we could talk about anything”, adding: “It falls to us to work together and accomplish things meaningful for the people of our two countries and the world at large.”

Such words stroke Trump’s inflated ego and are designed to create a desire to cooperate with rather than to confront China and its leader. Flattery worked so well for Kim Jong-un that Trump has said that he and the North Korean leader were in love.

Thus far, the trade talks have proceeded without being directly affected by American actions against Huawei Technologies, China’s biggest telecoms manufacturer. The company’s chief financial officer, Meng Wanzhou, is being detained in Canada as a result of an American request for extradition in relation to charges of bank fraud and violation of US sanctions on Iran.

In December, shortly after Canada detained Meng, Trump said he would consider intervening in the case if it would help forge “the largest trade deal ever made”, thus seemingly politicizing the extradition request.

Last Thursday, after the two-day trade talks in Washington, the American president was asked if the Huawei case had been discussed. He answered: “It will be, but it hasn’t been discussed yet.”

Trump did not say how the case would be discussed. But if he decided to intervene – that is, ease up legal pressures on Huawei in order to get a trade deal with China – he would weaken the rule of law in the United States and politically taint the extradition process.

Trump and Xi have agreed to meet in late February to seal any agreement. Under such circumstances, there would be great pressure on both Trump and Xi to make last-minute concessions to get a deal. Xi may well feel he has more to lose since he cannot afford to appear weak. Trump, on the other hand, will badly want an accord that he can characterize as a win.

Remember, after meeting Kim, Trump announced that North Korea was no longer a nuclear threat. However, its nuclear weapons program remains.

By framing the final accord as one between two presidents, Trump became his own chief negotiator. He can declare whatever pact is reached “the greatest deal ever made”.

So, while the US president may be the driving force behind the trade war, his obsession with being in the limelight claiming historic achievements may, ironically, cause him to settle for less than the comprehensive deal he wants.

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Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.