TRUMP AND CHINA: The Art of the Desperate Deal: Will Robert Lighthizer Restrain Donald Trump's Impulse to Take a Headline-Grabbing and Self-Defeating China Deal?

By Kuttner, Robert | The American Prospect, Spring 2019 | Go to article overview

TRUMP AND CHINA: The Art of the Desperate Deal: Will Robert Lighthizer Restrain Donald Trump's Impulse to Take a Headline-Grabbing and Self-Defeating China Deal?


Kuttner, Robert, The American Prospect


Ever since China was admitted to the World Trade Organization in 2001, the trade imbalance between the United States and China has become ever more lopsided. In 2001, the deficit stood at $83 billion. In 2017, it reached $375 billion. Rather than moving toward a more open economy, as enthusiasts of WTO membership predicted, China has intensified its policies of state-led capitalism and protectionism. Combined with its outright technology theft, these policies have enabled China to achieve domination in industry after industry, with grave economic and geopolitical consequences for the U.S.

Robert Lighthizer, the U.S. trade representative, aims to change that. He is dead serious about using America's economic and political leverage to reset the U.S.-China relationship. An anomaly among Trump's appointees, Lighthizer is deeply knowledgeable about his subject, strategically clear about his goals, and tactically astute as a negotiator. And unlike his last four predecessors as USTR, Lighthizer unabashedly embraces a salutary brand of nationalism. To use a very old-fashioned word, Lighthizer is a patriot, someone who truly cares about whether U.S. industry endures--and a far more serious man than his boss.

There's only one person who can undermine what Lighthizer is trying to achieve. That would be Donald Trump. Why? Because Trump is looking for a quick deal that gives him bragging rights, while Lighthizer is playing a long game for systemic change.

After Trump waived his own March 1 deadline for a major increase in tariffs on Chinese goods absent a major agreement, he sounded more and more bullish about the prospects of an imminent deal, issuing tweets on the great progress that has been made. On February 25, Trump crowed to a White House gathering of the nation's governors that "we're going to have another summit, we're going to have a signing summit, which is even better, so hopefully we can get that completed, but we're getting very, very close."

The more Trump trumpeted success before progress had been agreed to, the more he invited the Chinese to harden their line, and the more he undercut his own negotiators. In reality, the deal that was on the table in early March, when Beijing insisted on delaying the signing ceremony several weeks pending further talks, was far from adequate. China had sought to sucker-punch Trump by offering to purchase a lot more stuff--soybeans, beef, chickens, natural gas, semiconductors--but not to make changes in China's mercantilist system of state support for its own industries.

You can understand the appeal of a deal. If Trump and China's President Xi Jinping can announce an agreement consisting of specific commitments to purchase lots more U.S. products, plus some vague, easily evaded promises to reduce aspects of Chinese mercantilism, it will produce several tactical wins for the president. First, it will divert attention from Trump's other woes. Second, there will be favorable headlines that Trump has come to his senses on tariffs and avoided a "trade war" with China. Going into an election year, the farm lobby and farm-belt voters will be relieved and grateful. So will the large segment of American corporations and banks that profit from the status quo. The Dow will jump several hundred points, reflecting both general approval and the prospect of increased exports and profits. Best of all, the deal will be announced at Mar-a-Lago, with a smiling Xi at Trump's side.

And China's system will not change at all.

Should all that happen, it will be a stunning defeat for the man who is probably Trump's most competent and conscientious appointee. To date, says China journalist and scholar James Mann, "Lighthizer has been the driving force in persuading Trump not to take deals that would generate headlines but not alter China's system." Given China's hard line and Trump's eagerness for a deal, it will take something close to a miracle for Lighthizer to prevail. …

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