Financial Times

China poses ultimate test of Trump’s rationality

by Edward Luce, FT

June 14, 2018 | 4:22 pm
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Diplomacy is about getting other countries to do what you want them to do. Without China’s help, Donald Trump cannot hope to enforce his deal with Kim Jong Un. Eliminating North Korea’s nuclear arsenal is Mr Trump’s biggest goal — his reputation for dealmaking rests almost exclusively on it. Yet reaching that prize undercuts a key element of his America First agenda. On Friday, his administration will unveil the latest list of targeted Chinese goods. A trade war with China could prove disastrous to the North Korea agreement. Mr Trump is thus faced with a choice. Should he wreck the deal of the century by escalating America’s trade dispute with China? Or should he confine his trade belligerence to America’s allies?

It says a lot about Mr Trump’s volatility that few have much clue which path he will take. The first choice — picking a fight with China when he most needs its help — would vindicate those who think Mr Trump is irrational. It would be like putting his money on a horse then slipping arsenic into its oats. China would lift its sanctions on North Korea. Since 90 per cent of North Korea’s trade is with China, that would end its isolation. Without China, there would have been no “maximum pressure”. Without Xi Jinping’s prodding, Mr Kim may not have even agreed to this week’s summit.

Such a move would confirm the “diplotainment” theory of Mr Trump’s motives. Rather than caring about outcomes, Mr Trump lives for day-to-day ratings. His meeting with Kim Jong Un was the epitome of reality TV diplomacy. Simply by holding the summit, his prize was achieved. The celebrity leaders met and made diplomatic history. On his return from Singapore, Mr Trump tweeted: “There is no longer a Nuclear Threat from North Korea.” If Mr Trump really believed that, it would be hard to retain much hope that he is rational. North Korea has just the same nuclear capacity after the summit as it had beforehand. Evidence of Mr Trump’s inability to fix means to ends would come if he chose now to step up his trade war with China. As the Chinese could tell him, a man who chases two rabbits catches neither.

Mr Trump’s other option is to enlist Beijing’s help. He could still publish the list of targeted Chinese goods. But he could delay imposing the tariffs. That is what Mike Pompeo, the US secretary of state, has been urging him to do. It is Mr Pompeo’s job to put flesh on to Tuesday’s vaguely-worded statement — a task already fraught with difficulties. On Wednesday Mr Pompeo lashed out when asked how the US could verify Mr Kim’s pledge to denuclearise. Merely to pose the question was “insulting and ridiculous and frankly ludicrous”, he said. It nevertheless goes to the heart of the matter. By Thursday the US secretary of state had altered his tone saying there would be no sanctions easing until North Korea had been denuclearised. Ronald Reagan famously said that you must “trust but verify”. So far Mr Trump is gambling on trust. Only China can cajole North Korea to accept the “any time, anywhere” inspections that Mr Trump claims was missing from the Iran nuclear deal.

Securing China’s help will also mean fending off a domestic backlash. A group of senators is trying to undo Mr Trump’s reprieve for ZTE, the Chinese telecoms operator, which would have been bankrupted by US punitive actions. At Mr Xi’s request, Mr Trump diluted the penalties. It makes it harder for Mr Trump to do nothing about Mr Xi’s “Made in China 2025” agenda. The contrast between Mr Trump’s contempt for America’s allies and his fascination with autocrats is growing. Mr Trump said he trusted the “smart” Mr Kim while dismissing Justin Trudeau, Canada’s prime minister, as “weak and dishonest”. He also singled out Mr Xi for praise. “The president who roared like a lion is governing like a lamb when it comes to China,” tweeted Chuck Schumer, the Senate Democratic leader.

Yet China has little cause to worry. Stripped of bombast, Mr Trump has two unerring instincts. The first is to ensure North Korea does not target the US mainland. Mr Kim could probably keep his arsenal if he gave up his long-range missiles. China would benefit from that. Japan would be cut adrift. The end of Pax Americana would be hastened. The second is to repatriate manufacturing jobs to America. The latter is romantic — and it ignores China’s goal of technological supremacy. Either way, China could survive a trade war over 20th century goods. It hardly matters whether Mr Xi thinks Mr Trump is irrational. His actions are already serving China’s interests.

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by Edward Luce, FT

June 14, 2018 | 4:22 pm
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