Trump's Quote-Unquote 'Good Week' Was Mostly Good For China

There’s a common thread between last week’s two biggest stories, and it isn’t that the U.S. is winning.
Mike Theiler / Reuters

To his most ardent supporters, Donald Trump is a kind of genius whose intuition takes him into policy realms where lesser leaders fear to tread. He takes willful pleasure in not reading briefing books or checking with experts, but in trusting his ample gut.

Exhibits A and B, which dominated the news last week, were his declaration of tariffs on aluminum and steel ― to the horror of every orthodox economist, and the joy of his base ― and his even more abrupt decision to accept the invitation of North Korean leader Kim Jong Un for a face-to-face meeting.

Might either of these impulsive decisions produce policy breakthroughs, proving the conventional view of both substance and process wrong? Don’t bet on it.

Take the case of Korea first.

Going back to the Clinton administration, the North Koreans have repeatedly tried to pull the United States into a process that would trade some kind of limits on their nuclear program for security guarantees and the lifting of economic sanctions. But after more than three decades of false starts under three generations of Kims, starting with the current leader’s grandfather Kim Il Sung in 1994, North Korea’s program of intercontinental missiles and nuclear weapons has only moved relentlessly forward. Given the logic of mutually assured destruction, Washington has lost leverage over Pyongyang with every passing year.

The diplomacy is even more complicated now, because a left-of-center president governs in South Korea. To the consternation of the U.S., which has wanted to keep North Korea isolated, South Korean President Moon Jae-in has made multiple overtures to the North to move toward more normal relations. It was a South Korean emissary who passed on Kim’s invitation to meet with Trump, which Trump impulsively accepted. The same emissary said Kim has already agreed to temporarily suspend nuclear and missile testing as a gesture while talks are ongoing.

What sort of agreement could conceivably result? Ironically, a rough model is the deal with Iran, a bargain negotiated by Barack Obama that Trump scorns and regularly threatens to upend.

North Korea would have to promise to freeze or roll back its nuclear program. In exchange, the U.S. would lift sanctions and maybe even pull some troops from the peninsula. There would be more normalization of relations between South and North, and the whole deal would be guaranteed by the great powers, including China.

To say that this is improbable is an understatement. Even assuming the most competent and nuanced of diplomacy — and remember we are talking about Donald Trump — Kim is not about to give up his nuclear program, nor is he likely to subject it to verifiable international inspection, an offer that has been regularly made and withdrawn.

The best we might hope for would be a series of “trust-building” baby steps: a moratorium on the name-calling; a suspension of tests; and more moves toward rapprochement between South and North, with Washington’s blessing. This might give both Trump and Kim some favorable publicity, but if it did nothing to slow the development of stronger bombs and longer-range missiles, the advantage would be Kim’s.

The meeting may never happen, as these risks are explained to Trump. If the meeting does happen, it could degenerate into insults. The worst case ― that Kim’s charm offensive tricks Trump into a deal that’s advantageous for North Korea ― is probably unlikely. Trump loves the bold stroke, but he doesn’t want to look like a fool.

The tariffs on steel and aluminum are another story.

To hear the mainstream press tell it, this was another abrupt, impulsive decision that surprised Trump’s advisers, that risks setting off a trade war, and that will cost America dearly as products that use aluminum and steel become more expensive ― destroying more jobs than the tariffs save.

Most of this is wrong, though Trump did make a major mistake in not targeting the retaliation against China. The fact is, both of these domestic industries are in dire straits, and most of the global glut is a result of China’s state-subsidized production. Trump mentioned China’s role when he ordered the tariffs, but weirdly imposed them on the entire world, exempting NAFTA partners Canada and Mexico only as an afterthought at the last minute and, even more perversely, applying the tariffs to the European Union, whose help we will need in a common front against China’s predatory state-led capitalism.

But this was no impulsive gesture. It is the consequence of an extensive investigation by the Commerce Department, released in January, documenting the problem of Chinese overproduction and its disastrous impact in the U.S.

After the report was released, Trump’s trade officials gave him several policy options. He picked the most dramatic and most self-defeating one.

What now? The odds of a trade war are vanishingly small. The entire history of tariffs is that they are in place for a while and then are modified or withdrawn when serious retaliation is threatened. If investors expected a full-blown trade war, the Dow would not have risen by 440 points on Friday. Over the weekend, Robert Lighthizer, the smartest of Trump’s trade advisers, was already meeting with his European and Japanese counterparts in Brussels to discuss how to modify the tariffs.

If Trump bothers to listen to his trade advisers, who are among the more serious and well-informed of his inner staff, he will eventually modify these tariffs so that they are part of a coordinated strategy with the EU to confront China’s mercantilism.

In the past couple of weeks, China has waived term limits for its autocratic leader, Xi Jinping. Meanwhile, the U.S. government’s Committee on Foreign Investment in the U.S. awoke from its usual slumber and moved to block a hostile takeover of one of America’s crown tech jewels, Qualcomm, saying the deal could ultimately put the company’s Chinese state-backed competitors at an advantage. The Chinese were surely pleased that Trump’s tariffs did not target them, and looked on benignly as Trump embarked on what is likely to be a fool’s errand to meet with their ally, Kim Jong Un.

Trump was in high spirits this weekend as he campaigned in Pennsylvania for the Republican candidate in Tuesday’s special election for a House seat in a steel-producing district. You might say Trump had a pretty good week. Xi Jinping had a better one.

Robert Kuttner is co-editor of The American Prospect and professor at Brandeis University’s Heller School. His forthcoming book is Can Democracy Survive Global Capitalism? Like him on Facebook and follow him on Twitter at @rkuttnerwrites.

Before You Go