US Policy

Trump Needs to Walk Fine Line in Oct. China Trade Talks

L . Thomas Block
L . Thomas Block
Washington Policy Strategist
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While the news of the week was dominated by the President Donald Trump’s somewhat weak performance with a sharpie as Weatherman-in-Chief, there is some glimmer of hope in the trade spat between the US and China.

The two sides have apparently had low level telephone conversations, and agreed to reschedule the delayed September meeting in Washington, D.C., to October. Although, neither side took even a token step towards compromise, the Chinese have so far refrained from issuing a tit-for-tat reprisals to the last round of 5% increases on existing tariffs that President Trump issued last month.

Furthermore, the Chinese have helped the President’s position by agreeing to bring a senior trade delegation to the meeting next month. The President continues to talk about how the Chinese economy will “crumble” if they don’t come to an agreement with the US, and that country’s sending of a trade delegation helps re-enforce that story.

However, if Trump makes excessively harsh statements against China, or interferes with the delicate situation in Hong Kong, or places new tariffs on Chinese products, then the October talks would likely be delayed or cancelled. Facing next year’s reelection, the President has a lot at stake and the Chinese hold some very good cards.

Congress returned and the House Democratic leadership quickly announced that they will pass a Continuing Resolution (CR) bill in the middle of the month in order to avoid another drama over a possible government shutdown October 1. From past experiences we know that the President sometimes uses drama and unpredictability as a negotiating tool.

With the budget agreement reached prior to the summer break having set spending targets for the new fiscal year, it isn’t clear whether or not the President will try to force his spending priorities on the House with a shutdown threat, or accept a process that avoids a crisis and eventually leads to higher spending for both defense and domestic programs.

Meanwhile, Congressional Republicans, busy with their focus on retaining control of the Senate and increasing seats in the House, would like to avoid a budget confrontation.

Figure: Top Trump Tweets

Trump Needs to Walk Fine Line in Oct. China Trade Talks

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L . Thomas Block
L . Thomas Block
Washington Policy Strategist
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