Political storm clouds in US over China trade deal

Fresh off what proved to be a stinging political defeat for Donald Trump in an immigration policy fight with Democrats, the US president is in desperate need for a “win.” Judging from his recent comments, he is gearing up to sell a trade deal with China as just that.

But amid furious lobbying efforts from much of the business community for ending the costly tariff battle, there are potentially equal and opposite forces building that could derail a trade deal widely expected to come out of current talks.

Vice-Premier Liu He arrived in Washington on Monday, leading a delegation that will continue negotiations on Thursday. President Trump reiterated that the March 1 deadline to come to an agreement is not set in stone, saying Monday that it is “not a magical date.”

Unless Liu is bringing new, more substantial concessions on core “structural” issues, calls for Trump to abandon ship and increase tariffs will grow deafeningly loud in some circles. That includes among conservative media commentators who have proven successful in changing Trump’s mind in the past.

The same vicious circle helped propel Trump to force a government shutdown on the immigration issue, against the advice of most in his own party.

“It would be better to hit Beijing with higher tariffs and wait for them to come to us with a better deal in a second Trump term; a distinct possibility since China needs trade with America far more than we need it with them,” a Fox News editorial argued on Sunday after Trump trumpeted the “big progress being made on soooo many different fronts!” in trade talks.

Well known to be Trump’s favorite news outlet, Fox News was quick to criticize Trump’s failure to negotiate a better deal with Democrats on funding for a border wall.

The poster child for China hawks in Washington, Gordon Chang, wrote that “there was virtually no progress on ‘structural’ issues in the just-concluded U.S.-China trade talks in Beijing, and unfortunately there won’t be any unless President Donald Trump decides to walk away from the ongoing negotiations.”

Perhaps more disconcerting for those who are worried that a deal might fall apart is the fact that even free-traders have begun to express anxiety that Trump might pass up an opportunity to pressure China.

“Without enforcement, this deal fails,” Myron Brilliant, head of international affairs at the US-China Chamber of Commerce said in an interview with CNBC. “Implementation and enforcement are going to be two key elements – so you need to have implementation, you need to have follow-through, but you need to have enforcement mechanisms that will ensure that both sides have trust that this deal is sustaining and verifiable.”

But  the answer as to what kind of a binding enforcement mechanism will be palatable to China remains elusive.

One thing is for certain, Trump has shown a willingness to back out of deals at the last minute.

At least once last spring, before the implementation of the first tranche of tariffs on Chinese goods, it appeared that a deal had been struck with China. That deal looked a lot like what has been reported of Chinese concessions in this deal so far.

Another example could be seen in the recent immigration debate in Washington, when Trump gave the Senate the green light to vote on a spending bill – which they passed unanimously – only to go back and say he won’t support anything without more funding for a border wall.

Trump has hinted that he may be willing to accept a deal that sees China buy more US products and make some cosmetic changes that can be sold as “structural” reforms. It is anyone’s guess how he will react to the swift backlash such a deal would provoke.