It all started with washing machines.
Soon, it could be investment restrictions. But with an impeachment inquiry underway, will a trade deal be reached with China?
On Jan. 22, 2018, just a year after he was inaugurated, President Donald Trump announced the first step in his “America First” trade policy plan: placing a tariff on solar panels and washing machines. A month later, it was steel and aluminum.
Somewhere between those two points, this happened:
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
It has proved to be anything but easy, with a long list of bumps along the way.
‘Trade Wars Are Good, And Easy To Win’
Almost two years later, the Trump Administration is considering placing restrictions on U.S. investments in Chinese companies including those listed and traded in the U.S. What has happened between the start of this feud and now has been a non-stop back and forth of imposing tariffs and promises broken.
In March it was reported that the U.S. and China were “closing in” on a trade deal, but nothing came of it. It wasn’t the first time, but with talks set to pick up again on Oct. 10, Trump now says he doesn’t need to get a deal done with China before the 2020 election.
Just a couple weeks ago, there was talks of an interim trade deal between the two superpowers. This came after reports that Trump advisors were growing increasingly concerned the trade war was hurting the U.S. economy, which could be detrimental to President Trump in his re-election campaign.
After news that China was buying soybeans from Brazil, who has upped their production during the trade war, questions emerged of whether Brazil could keep up with China’s large demand. Then, things seemed to be looking up when China announced it would make large purchases of soybeans and pork from U.S. producers — which it seems to have done.
But just over a week later, reports from the White House said it was considering restricting the flow of capital into Chinese companies, seeming to signal the opposite. Trump officials have downplayed this news, saying the two sides are, again, closing in on a deal.
Opportunity With Impeachment Inquiry?
Within the last week, Speaker of the House Nancy Pelosi officially launched an impeachment inquiry, after a whistleblower complaint stated that Trump “pressured” Ukraine officials to investigate Joe Biden and his son by threatening to withhold foreign aid that had already been allocated by Congress.
With an impeachment inquiry underway, a stalled legislative body and a USMCA trade deal seemingly dead in the water, an interim trade deal with China appears to be the answer. As has been the case throughout his presidency, striking a deal with China presents an opportunity for Trump to pick up a “win” in the midst of political turmoil.
While it will have nothing to do with his impeachment inquiry, ending the tariff war with China could help alleviate some economic anxieties and raise Trump’s approval rating to provide a momentary boost for his presidency.
Trump’s timeline to accomplish a trade deal is shrinking, however. Congress is now in recess for two weeks, but some key impeachment depositions will take place throughout early October.
Donald Trump made a ton of promises on the campaign trail, most of which haven’t happened yet. From the wall to USMCA, from helping Midwest farmers to getting a deal done with China; there have been plenty of setbacks and let-downs.
But now, as House Democrats launch an impeachment investigation, will Trump look to swiftly fulfill some of these promises to muster up any public approval he can? Trump has said many times that he won’t agree to a “bad deal” with China, but what does that mean?
Chen Wenling, a chief economist for The China Centre for International Economic Exchanges, said Trump should rescind his tariffs, and resist imposing more if he wants to get a deal done. She also said the Chinese expect Trump to win re-election, and that it would work out in their favor.
“Trump is likely to win the election, and it would a good news for China,” Chen said. “He is completely clueless in fighting the trade war without any strategies or master plans, and he has bullied US allies.”
By Josh Cook