Is Donald Trump being brave or crazy in China trade war? US president should pick a stance and stick to it

(Originally published on September 3, 2019 here by South China Morning Post.)

US President Donald Trump ended last week much like he did the one before, lashing out like a five-year-old at an amusement park, denied cotton candy.

He called American companies operating in China “badly run and weak” for raising concerns about his trade war with China.

Trump had his reasons, of course. White House aides told CNN that the phone calls he said his trade negotiating team had with China during the G7 summit in France “didn’t happen the way he said they did”.

One would have expected Trump to blast folks within the White House for trying to set the record straight, but there was another thorn in his side, apparently causing more irritation.

Namely, corporate America and its dire warnings about their possible loss of one of the biggest consumer and industrial markets in the world.

The American corporate sector made it clear that they’re not following Trump’s tantrum-induced order to “immediately find alternatives to China”.

The US Chamber of Commerce and a coalition of Industry associations, collectively representing huge chunks of the Dow Jones Industrial Average and the S&P 500, pose more of a threat to Trump than White House aides, who can be tossed out faster than the US leader can retweet Sean Hannity.

The pushback was most apparent in a press conference by the US-China Business Council – which counts General Motors, Honeywell and Walmart among its members – to announce the results of its annual membership survey.

Asked about Trump’s order, the council’s president, Craig Allen, said: “Our members are in China for the long term. None of them are anticipating orders to leave.”

Most leaders would say this situation requires some deft diplomacy. Perhaps a negotiation around what sort of US corporate operations in China should be considered threatening to national security and what time frames these companies should be looking at to relocate them.

Instead, Trump’s response to the red flags US multinationals are raising was as confrontational as a band of vegan drag queens trying to shut down a Texas barbecue.

So is Trump brave or crazy? Think about that for a moment because we’ll come back to this question. In the meantime, let’s review where we are in Trump’s stand-off with Beijing.

On the one hand, he’s telling lies to counter the entirely reasonable assumption that his administration is making no progress in striking a deal with America’s third-largest export market.

In the process of walking back his fits of pique, Trump showers his Chinese counterpart with praise. Any day now his references to his friend, the “great leader” Xi Jinping, will morph into “dear leader” or maybe “paramount leader”.

At the same time, Trump berates American companies doing business with China. As if the years that they have spent capturing a share of a market accounting for about 15 per cent of the global GDP required no effort.

As if punitive tariffs of 25 per cent on products and parts that they will sell in the US won’t be either passed on to American consumers or written down as losses, two options that will drag down economic growth.

Asked about the contradiction after his most recent “great leader” reference to Xi, Trump explained that this is just his Jekyll and Hyde negotiating strategy, which was very helpful for the few people of the Earth who didn’t already know this.

At the moment, Trump is showing his good-cop side, the one who’s a big fan of Xi and looking forward to further negotiation.

This won’t last long, though. Before long, he’ll capitulate to those around him who insist that America’s only hope for survival depends on slaying the red dragon.

Which brings us full circle. If it’s so essential to subdue China, why not cut all diplomatic ties with Beijing and set a blanket tariff of 100 per cent on everything arriving from the country?

When you consider how contradictory Trump’s non-strategy towards China is, to answer the question we posed earlier, schizophrenic is probably the more accurate diagnosis.

If Trump was brave, he would pick one of his two diametrically opposed positions and stick to it.

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