Chinese negotiators left Washington this weekend with a significant win: a willingness by the Trump administration to hold off for now on imposing tariffs on up to $150 billion in Chinese imports. China gave up little in return, spurning the administration’s nudges for a concrete commitment to buy more goods from the United States, and avoiding limits on its efforts to build new high-tech Chinese industries.
China’s propaganda machine took a victory lap after the talks, proclaiming that a strong challenge from the United States had been turned aside, at least for now. “Whether in Beijing or Washington, in the face of the unreasonable demands of the United States, the Chinese government has always resolutely fought back, never compromised, and did not accept the restrictions set by the other side,” the official Xinhua news service said in a commentary on Sunday.
.. One photo was taken during the trade talks in Washington, appearing, if somewhat biasedly, to trumpet the youthfulness of Chinese delegates compared with American lawmakers. Another, dated from 1901, showed the opposite as representatives from China and colonial powers signed an accord to end the Boxer Rebellion, considered a national humiliation.
.. China’s success partly comes from its ability to stick to a single strategy in trade. Even as Beijing has shown a willingness to talk and make peace offerings in the form of multibillion-dollar import contracts, it has held fast to its refusal to make any commitment for a fixed reduction in its trade gap with the United States.
.. The trade imbalance between the countries has actually widened since Mr. Trump visited Beijing in November
.. Beijing also has not bent on its Made in China 2025 initiative, an industrial modernization program that Washington and American business groups complain forces foreign companies to share their best technology while potentially creating state-sponsored rivals.
.. White House trade officials have more expertise with trade law, but China has a small but cohesive team of negotiators who report directly to Liu He, a vice premier and nearly lifelong friend of Xi Jinping
.. Policy decisions that once took a month can now take as little as a day
.. China only committed to continue buying ever-rising quantities of American food and fossil fuels
.. Trump suggested on Thursday that China might have prodded Mr. Kim to threaten to cancel the summit meeting between the two leaders planned for June 12.
.. Mr. Trump’s perception of a link indicates that at the very least the North Korea issue may have been a constraint on American officials’ willingness to confront their Chinese counterparts.
.. In some ways, Beijing may find it almost impossible to agree to American demands. The United States exports only $130 billion in goods a year to China. Finding more goods to buy to reduce China’s trade surplus by $200 billion would be extremely difficult, except if China cut its own exports to the United States.
“It is kind of unrealistic — and if Chinese officials agree, they will face a lot of pressure from public opinion,”
Kushners Near Deal With Qatar-Linked Company for Troubled Tower
The company controlled by the family of the White House adviser Jared Kushner is close to receiving a bailout of its financially troubled flagship building by a company with ties to the government of Qatar, according to executives briefed on the deal.
.. Mr. Kushner and his son Jared, President Trump’s son-in-law and one of his key advisers, bought the office tower, which is between 52nd and 53rd Streets, 11 years ago for a record-setting $1.8 billion. But the building today only generates about half its annual mortgage payment, and 30 percent of the 41-story tower is vacant.
In late 2016, Mr. Kushner and his son were close to a much different kind of deal with Anbang, a giant Chinese insurance company with ties to the country’s ruling elite, and with a billionaire from Qatar, Hamad bin Jassim Al-Thani. That plan involved demolishing the existing building at 666 Fifth and erecting a $7.5 billion luxury super tower.
.. Although he resigned as chief executive of the company when he joined the White House in January 2017, Mr. Kushner retained most of his stake in the firm. He shed some of the assets — including his stake in 666 Fifth Avenue — by selling them to a trust controlled by his mother.
Trump’s Dream Come True: Trashing Obama and Iran in One Move
Trump, by taking a hard line on Iran, drew some needed attention to Iran’s bad behavior and created an opportunity to improve the nuclear deal. But to do so would have required Trump to admit that there was merit in the deal Obama had forged and to be content with limited, but valuable, fixes that our European allies likely would have embraced.
.. Instead, Trump pushed for the max, torched the whole bridge, separating us from Germany, France and Britain, undermining the forces of moderation in Iran.
.. Color me dubious that a president who has not been able to manage his confrontation with a stripper, or prevent leaks in his White House, can manage a multifront strategy for confronting Iran and North Korea and trade wars with China, Europe and Mexico.
.. Obama’s view of the Middle East was that it was an outlier region, where a toxic brew of religious extremism, tribalism, oil, corruption, climate change and mis-governance made positive change from outside impossible; it had to come from within. By the end of his eight years, Obama was skeptical of all the leaders in the Middle East — Iranian, Arab and Israeli — and of their intentions.
.. It made Obama a policy minimalist on the Middle East: keep it simple and focus on the biggest threat.
.. By lifting sanctions on Iran as part of the deal, Obama hoped Iran would become integrated into the world and moderate the regime.
.. By contrast, Trump’s team is made up of maximalists. They want to limit Iran’s ballistic missile program, reverse its imperialistic reach into the Sunni Arab world, require Iran to accept terms that would ensure it could never ever enrich enough uranium for a nuclear bomb, and, if possible, induce regime change in Tehran.
.. in almost every country the alternative to autocracy turned out not to be democracy, but disorder or military dictatorship. If Iran, a country of 80 million people, was to go the way of Syria, it would destabilize the entire Middle East, and refugees would pour into Europe.
.. Iran has projected its power deep into the Arab world. But that was not because of money it got from the nuclear deal and sanctions relief, as argued by Trump & friends. It was because of the weakness of the Sunni Arab states and their internecine fighting, which created power vacuums that Iran has filled
.. Israel gets censured for implanting settlements deep into the West Bank. Saudi Arabia and the United Arab Emirates get censured for contributing to the humanitarian crisis in Yemen. But the Iranians have gotten away with murder, mass murder, at home and abroad — with virtually no censure.
.. In Syria, Iran’s special forces and its mercenary recruits — Hezbollah militiamen from Lebanon and Shiite hired guns from Central Asia — have helped President Bashar al-Assad perpetrate a ruthless genocide against Syrian Sunnis, including the use of poison gas, in order to maintain a pro-Shiite, pro-Iranian dictatorship in Damascus.
.. “The aim … is changing the demography” of Syria by settling Iranian-backed Shiite militiamen “from Afghanistan, Lebanon and other countries in the region … to fill the demographic vacuum” left by the hundreds of thousands of Syrians who have fled their civil war.
.. Rather than scrapping the deal, he should have told the Europeans that all he wanted to stay in the deal were three fixes:
1. Extend the ban on Iran’s enriching of uranium to weapons grade from the original 15 years Obama negotiated to 25 years.
2. Europe and the U.S. agree to impose sanctions if Iran ever attempts to build a missile with a range that could hit Europe or America.
3. The U.S. and Europe use diplomacy to spotlight and censure Iran’s “occupations” of Syria, Iraq and Lebanon.
Why China Won’t Yield to Trump
China may give Donald Trump some face-saving way out from the trade war he has started, but it won’t offer any substantive concessions. In other words, Trump’s tariffs will do nothing to improve America’s external balance, output, employment, or real wages. .. some defend Trump’s actions as a shrewd negotiating tactic to impel China to adjust its trade policies, such as the requirement that foreign companies share their intellectual property (IP) to gain access to the Chinese market.
.. Trump does not understand the basics of such a negotiation: he thinks that a country with a trade deficit necessarily has the stronger negotiating position. In reality, the surplus country is often in the stronger position, because it has accumulated financial claims against its “opponent.”
.. China does not necessarily even have to sell to wield influence. With US debt expanding and interest rates on the rise, even rumors that the Chinese might stop buying Treasury securities could be enough to drive down US bond prices and accelerate the increase in US interest rates.
.. While industries and consumers in China would also be hurt by a trade war, that country’s leaders can overrule interest groups and stifle protests.
In any case, public opinion will largely back retaliation against the US.
.. The Chinese remember well the Opium Wars of the nineteenth century, when the Middle Kingdom tried and failed to resist the British campaign to force it to open its economy to opium and other imports.
.. Add to that Trump’s reputation for flip-flopping, and the odds that Chinese leaders would bother making a deal with Trump to change their country’s trade policies seem small.
.. Even if China did decide to concede something to Trump, it would not be meaningful.
.. China could export less merchandise to the US directly, instead routing products through Taiwan and other countries, where some final assembly could take place.
.. The result would be economically meaningless; but so is the concept of the bilateral deficit itself, as Chinese exports to the US contain a high proportion of intermediate inputs produced in South Korea, the US, and elsewhere.
.. What really matters is that China’s current-account surplushas been falling since 2008, and now stands at a relatively small 1% of GDP.
.. America’s external deficit is growing, but that is the result not of trade policy; it stems from Republicans’ fiscal policy, which is blowing up the budget deficit and reducing national saving.
.. As for Trump’s complaints about China’s IP “theft,” there are some valid grievances on this front. But addressing this issue requires technical expertise and negotiating skill, not blunt threats based on inadequate knowledge.
Crucially, it would also require cooperation with other partners who have similar grievances with China, ideally including pressure applied through rules-based institutions like the World Trade Organization.
Trump is pursuing the opposite strategy, arguing that neither multilateralism nor bilateral negotiations work with China. Yet such tactics have helped to compel China to allow a 37% appreciation of the renminbi in 2004-2014 and to crack down on counterfeiting of US merchandise and theft of US software.
.. Trump may also want to avoid the WTO because the US doesn’t win all of the cases it brings there. But it does have a 90% success rate. And it is not as if the US has never violated international rules