Earlier this week, President Trump announced on Twitter that the increased tariffs on Chinese goods would go into effect tomorrow. The stock market went into a tizzy. The pundits denounced him for threatening the impending deal with China which would regularize US/China trade for years. Trump was portrayed as "out of control" by the mainstream media.
Three days later, we now have the full story. It seems that in advance of the meeting in Washington scheduled for today with the Chinese second in command, the Chinese had presented a revised draft agreement to the USA. In that draft, the Chinese made major changes which took back a whole series of items to which China had previously agreed during the lengthy negotiations. It was the sort of move that always worked in the past when dealing with America. The Chinese calculated that the White House would back down and accept a much worse deal than previously negotiated because the risk of the entire deal falling apart was too great a risk politically. Think of Barack Obama giving Iran everything it wanted -- including a path to nuclear weapons -- when the Iran deal was signed. Obama and chief negotiator John Kerry wanted a deal at all costs. They cared less what was in the deal and more that they would be able to say that they had reached a deal. This preference for reaching a deal at all costs was the standard American approach for many years.
It was in response to this new draft that President Trump announced that the higher tariffs would go into effect. With that one move he told China that they would not get away with this tactic and made clear what the downside would be for failing to reach an agreement today. It was a response that the Chinese must not have expected. An American president was actually demanding a GOOD deal for the USA. He was not going to take what he could get just so as to be able to claim success by getting a bad deal.
Knowing these facts helps one to understand why the Chinese did not cancel today's meeting. Many though that China would pull back from the meeting once Trump publically threatened them with these tariff increases. After all, going ahead with today's meeting after Trump's tweet makes China look weak. But China is, indeed, going ahead with the meeting. China's bluff was called and it folded.
This is a good development for the USA. We finally have a leader who is more interested in success for the USA than in photo op successes that are good political stunts but which do little for the country.
Three days later, we now have the full story. It seems that in advance of the meeting in Washington scheduled for today with the Chinese second in command, the Chinese had presented a revised draft agreement to the USA. In that draft, the Chinese made major changes which took back a whole series of items to which China had previously agreed during the lengthy negotiations. It was the sort of move that always worked in the past when dealing with America. The Chinese calculated that the White House would back down and accept a much worse deal than previously negotiated because the risk of the entire deal falling apart was too great a risk politically. Think of Barack Obama giving Iran everything it wanted -- including a path to nuclear weapons -- when the Iran deal was signed. Obama and chief negotiator John Kerry wanted a deal at all costs. They cared less what was in the deal and more that they would be able to say that they had reached a deal. This preference for reaching a deal at all costs was the standard American approach for many years.
It was in response to this new draft that President Trump announced that the higher tariffs would go into effect. With that one move he told China that they would not get away with this tactic and made clear what the downside would be for failing to reach an agreement today. It was a response that the Chinese must not have expected. An American president was actually demanding a GOOD deal for the USA. He was not going to take what he could get just so as to be able to claim success by getting a bad deal.
Knowing these facts helps one to understand why the Chinese did not cancel today's meeting. Many though that China would pull back from the meeting once Trump publically threatened them with these tariff increases. After all, going ahead with today's meeting after Trump's tweet makes China look weak. But China is, indeed, going ahead with the meeting. China's bluff was called and it folded.
This is a good development for the USA. We finally have a leader who is more interested in success for the USA than in photo op successes that are good political stunts but which do little for the country.
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