Chinese officials are growing increasingly wary of President Trump, suggesting that the risks of making a trade deal with him are greater than the costs of delaying one until after the 2020 election because of fears Trump might renege on an agreement, according to a Bloomberg report. That assessment came after a weekend of gyrating statements from Trump, who first slammed China on its imposition of retaliatory tariffs, next suggested he would ban U.S. companies from doing business in China, and then said the prospects of a trade deal were bright.
Chinese officials immediately dialed back expectations, contradicting Trump’s claims that Chinese trade officials had reached out to their U.S. counterparts by telephone this past weekend.
Farmers are already facing severe pressures due to the Sino-U.S. trade war, as China has curtailed imports of U.S. farm products, favoring soy from Brazil and Canadian wheat. American farm groups have pressed the administration to get trade back on track, but Chinese experts are downplaying that possibility.
“Trump’s credibility has become a key obstacle for China to reach a lasting deal with the U.S., according to Chinese officials familiar with the talks who asked not to be identified,” Bloomberg said. “Only a few negotiators in Beijing see a deal as actually possible ahead of the 2020 U.S. election, they said, in part because it’s dangerous for any official to advise President Xi Jinping to sign a deal that Trump may eventually break.”
“Trump’s flip-flop has further enlarged the distrust,” Tao Dong, vice chairman for Greater China at Credit Suisse Private Banking in Hong Kong, said in the Bloomberg article. “This makes a quick resolution nearly impossible.”
The Washington Post offered a similar assessment in a report from Beijing, saying that Chinese officials are content to wait Trump out. “I think they’ve decided Trump is a vacillating guy who can’t figure out what he wants and gets spooked every time the stock market goes down or someone accuses him of not being tough,” Arthur Kroeber, managing director of GaveKal Dragonomics, a consultancy in Beijing, said in the Post article.
“Although there are problems in China, they believe they have their economy under control, more so than Trump. They think he is more vulnerable to a slowdown and that they can afford to wait him out,” he said.
The Bloomberg article said, “China has prepared contingency plans in case of a no-deal scenario, three officials said, including putting U.S. companies on its unreliable entity list and stimulating the economy.”