May 22, 2018

3 factors behind Trump's cave on his China trade war

Photo: Shawn Thew, Pool/Getty Images

Who knows how the chest-bumping over China ends. But for now, President Trump’s anti-China advisers are right: The president is buckling on his threats to punish China with fundamental, lasting changes to trade tariffs and rules. 

The big picture: The reasons are threefold: North Korea, Steve Mnuchin and a lack of focus internally. 

1. North Korea 

  • It's TBD whether Trump got played by China on the trade war that's now "on h0ld." But North Korea politics clearly played a big role: Trump desperately wants the upcoming summit in Singapore to work. Going hard against China now could derail an already fraught journey to the summit.
  • So the White House is stuck in limbo, with a divided administration team and the Chinese offering easy, flashy wins that will likely have little long-term impact on the trade deficit.
  • It's very possible the U.S. team cut a deal that sounds good in a press release, but does little to change Chinese behavior.

2. Mnuchin 

  • Trump chose Treasury Secretary Steven Mnuchin — a moderate and free trader — to be point man on the China negotiations.
  • Remember it was Mnuchin who led the delegation and was in the one-on-ones with Chinese economic adviser Liu He in Beijing.
  • Mnuchin is more willing to compromise with China than U.S. Trade Representative Robert Lighthizer or trade adviser Peter Navarro, who are the most hardcore China hawks in senior administration positions in recent memory.

3. Fleeting attention

  • The president's attention is spread too thin — Iran, North Korea, Mueller and more — to wage a sustained battle with China.
  • Aides describe a White House deluged with big decisions and scant deciders — and a president perpetually obsessed and distracted by Mueller.

Be smart ... The Chinese have played this beautifully:

  • They know Trump wants Singapore to work, and that they hold the cards on North Korea.
  • And they know that Trump is obsessed with one number — the trade deficit.
  • He wants concrete things to boast about (jobs and buying American products).
  • No matter their promises, they can’t deliver a meaningful change in the trade deficit. But they can promise to buy billions of politically-useful U.S. products.

Breaking ... "China will cut the import duty on passenger cars to 15 percent, boosting auto makers such as BMW AG and Ford Motor Co.," per Bloomberg:

  • "While the levy reduction could be claimed ... as a concession to Trump and will be a boon to U.S. carmakers such as Tesla Inc., the move will also end up benefiting European and Asian manufacturers from Daimler AG to Toyota."

Go deeper

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 1 a.m. ET: 664,695 — Total deaths: 30,847 — Total recoveries: 140,156.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 1 a.m. ET: 124,464 — Total deaths: 2,191 — Total recoveries: 1,095.
  3. Federal government latest: President Trump announces new travel advisories for New York, New Jersey and Connecticut, but rules out quarantine enforcement. Per the CDC, residents of those states must now "refrain from non-essential domestic travel for 14 days," with the exception of critical infrastructure industry workers.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters who backed Trump's handling of the virus less than two weeks ago are balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
  8. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Coronavirus updates: Global death toll tops 30,000

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

The novel coronavirus has now killed more than 30,000 people around the world — with Italy reporting over 10,000 deaths, per Johns Hopkins data.

The big picture: The number of deaths from COVID-19 in the U.S. surpassed 2,000 on Saturday. The United States leads the world in confirmed coronavirus infections — more than 124,000 by late Saturday. The number of those recovered from the virus in the U.S. passed the 1,000-mark on Saturday evening.

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Trump rules out quarantine in New York, New Jersey, Connecticut after pushback

President Trump on the White House grounds on Saturdya. Photo: Sarah Silbiger/Getty Images

President Trump tweeted Saturday night that he's decided not to introduce quarantine enforcement measures fo New York, New Jersey and parts of Connecticut, but a "strong" travel advisory will be issued for those states. The CDC later announced domestic travel restrictions for the states.

Why it matters: Trump said hours earlier he was considering quarantine measures to combat the rise in novel coronavirus cases. But he received pushback, notably from New York Gov. Andrew Cuomo (D), who told CNN such a measure would cause "chaos." "This would be a federal declaration of war on states," Cuomo added.

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