Trump and China: A Calculated Cave?

Trump and China: A Calculated Cave?

What looked like a brewing US-China trade war has become an uncertain trade truce in recent days. The US will back away from a threatened $150 billion of tariffs, and in return, Beijing will buy more American foodstuffs and oil, under a framework agreed over the weekend. That’s on top of President Trump’s recent decision to relax a US ban that threatened to put ZTE, one of China’s biggest tech companies, out of business.


The specifics are yet to be hammered out, but it certainly looks like a climbdown by President Trump, who once thundered about holding China to account for “raping” the US economically. Will it last? Here’s a look at what the different players around the table are thinking, and where things could go from here.

Trump built much of his campaign around getting tough with China, but with a difficult midterm coming up he’s also wary of a trade war that could clobber farmers and manufacturers in the US heartland. What’s more, he really wants that summit with Kim Jong-un to go well (assuming it happens), and China’s President has serious pull with the North Korean dictator. Show Trump a deal with tweetable results, and he’s game. If the North Korea summit goes off the rails, or if China doesn’t follow through, he can always change his mind.

Treasury Secretary Steve Mnuchin and other free-traders see trade wars as bad for the economy, bad for business, and bad for midterms. And since President Xi is unlikely to budge on tougher US demands around China’s technology sector, it’s better to seek some concrete promises on energy and agricultural imports now and spin it to the base as a win.

To US Trade Rep Robert Lighthizer and other China hawks, any deal that failed to seriously address China’s support for its domestic tech giants and serial theft of US intellectual property would be a band-aid on a sucking chest wound. A few weeks ago, the hawks seemed to have Trump’s ear. Then the Kim summit and ZTE threw their plans for a loop. Free-traders may have the upper hand, but the hawks aren’t done arguing yet.

For Xi Jinping, buying more American products including oil and grains would be a small price to pay for a broader deal that saved one of China’s leading tech companies. If he can run out the clock on the trade hawks’ broader tech demands, that would be another major win.

Fleeting truce or legitimate breakthrough? With Trump’s own team so openly divided, and the boss himself so mercurial (just yesterday, Trump said he was “not really” pleased with how talks are going so far), it’s hard to be sure, but the free-traders have a chance to make a deal that would avoid costly tit-for-tat tariffs. We’ll know more by mid-June, after Commerce Secretary Wilbur Ross travels to Beijing and President Trump meets Kim in Singapore.

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China's GDP grew a lower-than-expected 4.9 percent year-on-year in the third quarter of 2021, a whopping three percentage points less than in the previous period. It's a big deal for the world's second-largest economy, the only major one that expanded throughout the pandemic — and now at risk of missing its growth target of 6 percent for the entire year.

Normally, such a drastic slowdown would have put the ruling Communist Party in a tizzy. But this time, Xi Jinping knows this is the price he must pay for his big plans to curb rising inequality and boost the middle class at the expense of the CCP's traditional economic mantra: high growth above all else.

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Ian Bremmer's Quick Take:

Read Ian Bremmer's wide-ranging essay in Foreign Affairs that puts in perspective both the challenge, and the opportunity, that comes from the unprecedented power of Big Tech.

Hi, everybody. Ian Bremmer here on the road, something we haven't done very much recently, but will increasingly as we try to move through COVID. And I want to talk to you about a new article that I just put out in Foreign Affairs that I'm calling "The Technopolar Moment." Not unipolar, not bipolar, not multipolar, technopolar. What the hell does technopolar mean?

It means that increasingly big technology companies are themselves geopolitical actors. So to understand the future of the world, you can't just look at the United States, Europe and China. You need to look at the big tech companies, too.

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China gets away with a lot these days in Hong Kong, Xinjiang, and elsewhere. That's because over the past decade, its economy has experienced explosive growth, making it an indispensable trading partner for almost every country in the world. At the same time, China has been expanding its share of the global economy, and is now set to overtake the US as the world's biggest economic powerhouse in the near term. We take a look at China's annual growth rate and share of the global economy based on GDP over the past decade.

The European Union is, for better or worse, the most ambitious experiment in human history in institutionalized multinational cooperation. Its success depends on the willingness of its members to abide by its rules.

In recent years, the populist-nationalist governments of former Communist bloc members Hungary and Poland have flouted some of those rules in order to boost their own popularity with citizens suspicious of the EU's liberal values on issues like immigration and minority rights. In response, the EU has scolded these "illiberal" governments and threatened forceful action – so far without much effect.

The fight between EU institutions and Poland and Hungary has escalated.

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Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

What is the legacy of Colin Powell?

Former Secretary of State Colin Powell tragically died of complications of COVID-19. He was the first Black Chairman of the Joint Chiefs of Staff, the first Black National Security Advisor and the first Black Secretary of State. And he leaves a legacy of a long career, dedicated almost entirely to public service.

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Can this guy defeat Viktor Orban? Hungary's opposition movement of odd bedfellows has finally settled on the person they think has the best chance of defeating PM Viktor Orbán at the ballot box: Péter Márki-Zay, a politically conservative small-town mayor from southeastern Hungary, who beat out left-leaning European Parliament member Klara Dobrev in a weekend poll. Márki-Zay has a lot going for him: as a devout Catholic and father of seven it will be hard for the ultraconservative Orbán to paint him as a progressive threat, even as Márki-Zay reaches out to reassure left-leaning groups that he will protect LGBTQ rights. What's more, Márki-Zay has little political baggage: until recently he was a marketing executive. But can the relatively inexperienced Márki-Zay keep the various opposition factions happy? The stakes couldn't be higher: since taking power more than a decade ago, Orbán has deliberately made Hungary into an "illiberal" state, cracking down on the press, undermining the rule of law, and clashing with the EU. Bonus: if Márki-Zay stays in the news, you get to say "Hódmezővásárhely" the name of the city he currently runs.

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5,600: Myanmar's military junta will release from prison 5,600 people who were jailed for protesting against last February's coup. The gesture, the biggest act of amnesty since the junta took power, comes just days after the Association of Southeast Asian Nations, which rarely interferes in members' internal affairs, said it would exclude the head of Myanmar's military from an upcoming regional meeting.

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Colin Powell's legacy

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