Opinion | Trump’s ‘Manchurian Candidate’ trade policies
While it’s no fun for Beijing right now, chaos in Washington plays into Xi’s hands in the long run
Among the classic books and movies enjoying an unlikely resurgence these last 12 months is The Manchurian Candidate.
Donald Trump’s unhinged presidency has been a boon for sales of George Orwell’s 1984 and Margaret Atwood’s The Handmaid’s Tale. The same with the above-mentioned 1959 book (and film adaptations) about a plot to install a Communist agent as US leader. The source of the intrigue is Trump’s surreal fealty to Russia’s Vladimir Putin. But shouldn’t we be questioning if Trump is a sleeper agent sent by China’s Xi Jinping?
I jest, of course. But, really, Xi in his wildest dreams couldn’t have written a better script for China’s designs on dominating Asia’s future than the Trump White House. And the plot is about to thicken as Trump blows off two major Asian summits over the next two months.
To be sure, Trump’s trade war is wreaking havoc in Beijing. Xi, it seems clear, underestimated Trump’s resolve to throw Asia’s biggest economy off balance. Trump was most definitely not bluffing. An escalating tariff arms race is jeopardizing China’s all-important export engine. That has Xi’s government reopening the credit spigot, exacerbating China’s bubbles.
But Trump is making China’s standing great again with Asian economies horrified at Washington so gleefully doing them ill. That’s likely to make the November summits of the Association of Southeast Asian Nations (Asean) and 21-member Asia-Pacific Economic Cooperation (Apec) forum moments for Xi to consolidate China’s growing power at the expense of Trump’s “America First” misadventure. Both Putin and Xi, it’s worth noting, will be at the latter event.
While Trump’s deputy will attend, vice-president Mike Pence is a side character in the tale of Trump versus Asia. Trump rules by fiat, not consensus, rendering hollow anything Pence says at Asean in Singapore or Apec in Papua New Guinea. And yet, by staying in Washington as Asia plots the future, Trump is already saying it all.
Trump is saying that his policies are more about punishing China, Japan, South Korea and other economies he views as taking advantage of America than forging partnerships. That was certainly the message from Trump pulling out of the Trans-Pacific Partnership. It also is the message from his forcing South Korea to reopen a free-trade deal in effect since 2012.
Trump is saying that his strategy to containing China’s rise lacks cohesion, vision or any noticeable road map to success. Whereas predecessor Barack Obama carried out a “pivot to Asia” strategy, Trump is pivoting away from the most promising markets of tomorrow, hurting corporate America’s longer-term interests.
Trump is saying that, in his view, China’s pain is America’s gain. Nothing could be further from the truth, though. Clearly, Trump is trying to blow up Xi’s “Made in China 2025” push to dominate everything from artificial intelligence to robots to software to renewable energy. Yet doing so won’t make America more innovative, productive or wealthier—only bold domestic reforms can do that.
Trump is saying he lacks an understanding of who holds the financial purse strings. Asia is home to Washington’s biggest bankers. China and Japan, for example, hold a combined $2.3 trillion of US Treasuries. Add in Asia’s other seven biggest Treasuries hoarders—India, included—and that exposure tops $3 trillion. Asia, in other words, holds Trumponomics’ mortgage and can call those loans at any moment. Any move by Washington’s bankers to stop buying US debt would slam world markets.
Trump is saying that his flirtation with North Korea’s Kim Jong-un was indeed a hollow photo op. If Trump were coming to Asia this autumn, he could’ve stopped by Seoul and held a three-way summit with Kim and South Korea’s Moon Jae-in. To no avail, as the Trump-Kim bromance turns sour.
Finally, Trump is saying that his administration is too preoccupied with scandal, investigation and paranoia to multitask. This raises troubling questions about the wherewithal of the White House to respond to a major financial crisis. Sharp drops in the Indian rupee, Indonesian rupiah and Philippine peso suggest a chaotic last few months of 2018.
While no fun for Beijing in the short run, chaos in Washington plays into Xi’s hands in the long run. Xi’s Manchurian candidate in the White House is seeing to that.
William Pesek, based in Tokyo, is a former columnist for Barron’s and Bloomberg and author of Japanization: What the World Can Learn from Japan’s Lost Decades.
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