President Donald Trump may never have wanted a prolonged trade war with China and was likely playing to supporters at home by threatening Beijing with tariffs to force it to cut its huge trade deficit with the US, a leading analyst said today.
“I don’t think he [Trump] was ever looking for anything more than a small victory,” Capital Link International CEO Brett McGonegal said, in an interview with Bloomberg Television.
He spoke after Chinese leader Xi Jinping vowed, in a speech in Hainan, to open up China by lowering tariffs on foreign cars and easing restrictions on foreign investment.
“There’s been so much press about this prolonged trade war. [But] I’ve never felt that that’s what the goal was by any means. I don’t think [Trump’s] looking that long-term – I know that sounds silly, but I think this was more of an immediate victory, if you can grab one.
“And I think he got a headline that’s very important to him. He’s gonna turn it into something bigger than it is. And now he’s going to go to all his constituents and say ‘Look, we had to stand our ground’.”
The so-called trade war with China was largely over, he believed.
“Xi today was the elder statesman. He addressed the world in a very proper respectful fashion. He talked about things that really have nothing to do with .. this trade war issue. He was a much bigger person today and spoke about something very important: celebrating the 40 years of Deng Xiaoping opening up China and this continuation of commitment to do it, while somebody else in another part of the world seems to be closing the doors.
“I think this is a very important step in the maturation of the Chinese government and Xi on the international stage.
“I think [Trump’s] playing a kind of game that’s domestically driven to kind of rally his constituency for the mid-term elections [in the US] and get attention elsewhere.”
Brett McGonegal is also a principle investor in Asia Times.