This article was published by The McAlvany Intelligence Advisor on Monday, December 3, 2018:
Following the two-and-a-half-hour dinner meeting with Chinese communist dictator Xi Jinping in Buenos Aires Saturday night, President Donald Trump claimed that he got an “incredible” deal from Xi:
It’s an incredible deal. If it happens it [will go] down as one of the largest deals ever made. What I’ll be doing is holding back on [raising] tariffs. China will be opening up. China will be getting rid of tariffs … China will be buying massive amounts of products from us.
The operative phrase is “If it happens….” The White House gave all the credit to Trump: he squeezed them, he pressed them, they wilted and gave him what he wanted. Talk about spin:
President Trump has agreed that, on January 1, 2019, he will leave the tariffs on $200 billion worth of product [being imported from China] at the 10 percent rate, and not raise it to 25 percent at this time.
Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent.
China will agree to purchase a not yet agreed upon, but very substantial amount of agricultural, energy, industrial and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately.
The spin from the Chinese was equally disingenuous. Chinese Foreign Minister Wang Yi and Commerce Vice Minister Wang Shouwen who attended the meeting said that the talks to finalize the details would only focus on removing altogether Trump’s tariffs, without any mention of a 90-day deadline. Nothing was said about China’s predatory behavior in the theft of intellectual property in its quest to become the global leader in digital technology. Nothing was said about it relenting from demanding the blackmail transfer of that technology in exchange for access to the Chinese market by American companies. Nothing was said about Chinese cyberwarfare being waged on America by hundreds of Chinese hackers. Nothing was said about backing off on its subsidizing critical industries like steel and aluminum. And nothing was said about its willingness to forego the manipulation of its currency to gain an advantage over American producers wanting to sell to Chinese consumers.
According to the Chinese, Trump got nuthin’. Peter Morici thinks the Chinese are correct. A hardliner professor of economics from the University of Maryland, Morici said:
President Xi has successfully slow-walked President Trump. The president has fallen into the same trap as Barack Obama, George W. Bush, and even Bill Clinton. He will get more platitudes and promises and very few results.
The evidence? As mentioned above, the press release from China following the meeting said nothing about the 90-day “truce.” March 1 is 90 days from now, just before the Chinese communists get together for their annual “legislative” session to determine national policy and who lives to implement it. A softliner willing to give Trump anything puts not only his career but his life in jeopardy.
Negotiations start next week in Washington. By March 1, if little is accomplished, Trump will likely be bought off once again: more time is needed to “finalize” the details, etc., etc. And Trump will raise the white flag and agree to another delay. And then another, and another.
Xi got what he wanted in Buenos Aires: Trump backed off his threat to raise tariffs further. Trump got a promise from the head of a regime known for not keeping its promises. What kind of a deal is that?
Morici is right. The question is: when March 1 rolls around and the Chinese attempt to stall once again, will Trump have grown a backbone by then, or will they continue to play him for the fool?
The Wall Street Journal: U.S., China Signal Progress on Trade
The Wall Street Journal: G-20 Agrees to Joint Statement, With Compromises