Month: May 2018

Trumps Trade Dispute with China – The Players and the Strategists

First a breakthrough, then again not: the trade dispute between the USA and China is going back and forth. Beijing has recognized that the US government is at loggerheads – and is making cool use of this.

“My way of doing business is very simple,” wrote Donald Trump in his bestseller The Art of the Deal. “Sometimes I give in, but mostly I get what I want.”

The book from 1987 founded the myth Trump. Today we know: Trump’s talent as a wheeler is at least doubtful, his great business wisdoms were invented by a ghost writer. However, he has a talent for self-marketing with which he made it to the White House.

But that’s where Trump’s production reaches its limits. Acute example: the trade dispute with China. The crisis erupted in March when Trump threatened punitive tariffs on Chinese imports, followed by counter threats from Beijing. Two high-level discussion groups were to prevent the conflict from escalating into a real trade war.

The last meeting in Washington, however, raised more questions than it answered. It ended this weekend with a meaningless statement, followed by contradictory appearances by his economic advisors. Nevertheless, the president praised himself in tweets on Monday for a breakthrough that did not exist.

Maybe that’s a negotiating strategy. But Trump and his team probably underestimated the Chinese. They, in turn, used dilettantism, internal strife and general disorientation among the Americans to block the recent negotiations. Trump’s people were still trying to trick the Chinese delegation at the last minute, according to several US media: Chief economic advisor Larry Kudlow hastily reported that Beijing was prepared to buy US products worth at least 200 billion dollars in order to reduce trade inequality – a figure that was addressed but never decided.

China denied, Kudlow rowed back, the talks were adjourned. The joint declaration, which they fought for until late at night, contained only vague declarations of intent.

China wants to import more American agricultural products and energy than before – which was planned anyway: “To meet domestic demand, China must import energy, animal feed and meat,” Brad Setser of the Council on Foreign Relations told the Washington Post. Such a deal would have been “offered to every US president”.

Beijing’s announcement on Tuesday to reduce import duties on cars does not solve the real conflict either. Trump wants China to reduce its billion-dollar trade surplus.

Nevertheless, in return for China’s announcements to date, the US has suspended the threatened punitive tariffs for the time being – which benefits the People’s Republic more than the US and was propagated by the Chinese state media as the greatest success of the talks: The USA had unilaterally agreed not to “start a trade war”. Also all other stimulating topics resulted only in vague phrases.

Here tactics, there chaos

China is playing for the long term, while Trump is acting on a short-term basis. He is obviously more concerned with a quick victory, a crisp slogan for the congress election campaign in the fall – and possibly even personal countertrades for the benefit of his own company.

How chaotic and uncoordinated the US procedure is, especially without an informed tour from the Oval Office, was already shown in the first round at the beginning of May. Kudlow, Finance Minister Steven Mnuchin, Trade Minister Wilbur Ross, Trade Representative Robert Lighthizer and Trump Advisor Peter Navarro travelled to Beijing. There was a gulf through the delegation, symbolic of the entire government: on the one hand, hardliners like Navarro who want to neutralize China; on the other hand, traditionalists like ex-banker Mnuchin. In Beijing they were so divided that according to US media reports they publicly shouted at each other and Navarro was temporarily excluded.

That was convenient for the Chinese. According to the New York Times, they had been cultivating Mnuchin, who advocated a gentler gait, for months as their “main contact”. It worked out: In Beijing, he conferred privately with the Chinese chief negotiator Liu He – which led to the vociferous dispute with Navarro.

The tactic from “The Art of the Deal” turns out to be a flop in the most momentous way so far. The book traced eleven steps to success at that time, from “Don’t dribble, but pad” to “Have fun! However, the others seem to be having the most fun at the moment.

Trump is Compromised

Donald Trump’s reticence towards the Russian president is striking. In an interview with FAZ.NET, journalist Luke Harding is convinced that Moscow has material against him.

In your book “Verrat” you describe Donald Trump’s close contacts with Moscow. Is the American President Agent Putin’s to you?

“agent” is not the right term, it makes the wrong associations. Donald Trump does not perform Cossack dances in the uniform of a Soviet colonel. What is crucial is that he has a special connection to Putin, both as a candidate, as an elected president and as a sworn president. One example is Trump’s reluctance to criticize the Kremlin chief – although he harshly criticizes everyone else, especially the Germans and their cars. He is rude to Theresa May, to the Mayor of London, to Hollywood, to the New York Times, to Jeff Sessions – but there is only one person on this planet to whom he is the kindness in person – Vladimir Putin. Trump has a habit of making a fool of himself about the height of little men and, when he talks about them, calling them small; Putin is very small, but Trump never mentions it.

What is the reason for Trump’s charm towards Putin?

He’s compromised. We have evidence that he was secretly recorded on video in Moscow. We don’t know what’s on the video. Maybe he goes to bed early and reads a 19th century French novella; maybe he can be seen having an exotic experience. What we know is that the KGB and its successor FSB have a long history of secretly recording celebrities on video. Trump’s connections with Russia go back a long time, to a trip in 1987, organized by the Soviet government. And paid for it, by the way. He was under surveillance even then. There is much to suggest that Trump is an on-off operation, so the KGB simply collected material to involve him and influence him. In secret service jargon, this is called “cultivating”, i.e. “growing up”.

Then what happened?

Trump was further “cultivated”. This was intensified during the Obama presidency in 2011, 2012 and 2013.

Are there any other clues besides the allegedly compromising video?

All members in Trump’s first team had a connection to Moscow or a Russian dimension in one way or another. Jeff Sessions, Michael Flynn, Rex Tillerson, Felix Sater, Paul Manafort or Carter Page. It seemed to me almost as if Moscow had put together Trump’s team.

But that’s not evidence.

The financial links are the heaviest. In fact, Trump’s companies have operated for three decades as a washing machine for Russian cash. And partly as a shelter for Russian gangsters. Many of them lived in the Trump Tower in the 1980s and 1990s. There’s evidence of that. Several of them were later convicted and sent to prison. It is remarkable that I describe all this in my book, and Donald Trump did not sue me. A hundred thousand copies were sold, the book was number one on the New York Times bestseller list, and I openly accuse him of laundering money. And he didn’t react. There hasn’t been a letter from a lawyer at Trump’s yet. You can interpret this as you like!

Please note this interview has been translated from German.