2018-05-30

Chinese Leaders Don't Like Unpredictable Behavior

AP: China says Trump hurts credibility with tariffs
China's government has accused the Trump administration of hurting its credibility by acting erratically on trade and vowed to fight back if Washington goes ahead with a threatened tariff hike.

A foreign ministry spokeswoman complained Wednesday that the U.S. decision to renew a threat to raise duties on a $50 billion list of Chinese goods conflicts with an agreement in mid-May aimed at settling that dispute.
Erratic behavior is a negotiating tactic. The goal remains the same.

Coverage/criticism of Trump is like someone watching a car driving from New York to Los Angeles. Ever time the car moves a bit left, they scream that it is headed into a median or into oncoming traffic. Every time it veers right, it is headed off the road and will crash. Or if it pulls off for gas, food or rest, it has altered its course and is now heading to Canada or Mexico.

I don't know how much Trump is doing this naturally and how much is planned, but it is much more planned that his critics realize. The unsettled feeling because Trump isn't behaving as they predict is also being felt in Beijing. That is a strength, not a weakness.

Everyone thinks Trump desperately wants deals. This is also a negotiating tactic. China keeps coming back with bad offers because it wants as cheap a deal as possible. Trump acts like he's considering it, then rejects it. It was never going to be accepted. China has to come back with a better offer. Trump doesn't need a deal to onshore manufacturing though, he can use tariffs and domestic reform. When he says things like (paraphrasing) "I want a deal, but if it doesn't happen, it doesn't happen" he's remaining on target the entire way.

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