China poses high-risk test for Trump

President Trump is facing an acute challenge with China that could define his first term and directly impact his chances for reelection.

Trump has made toughening up against China a key prong of his administration’s work. But a trade deal with Beijing has eluded him, with both sides instead ratcheting up tariffs on one another in an extended back-and-forth.

The widening trade war has spawned uncertainty that has unsettled the stock market and global economy as economists increasingly warn that a recession could be on the horizon.

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Securing a major deal with China would be a boon for Trump that he could herald on Twitter and at his campaign rallies. A failure to reach an agreement before the 2020 election, on the other hand, could dampen his chances if voters hurt by the trade war sour on the president. 

GOP strategist Doug Heye, who has been visiting states such as Iowa and Missouri, where farmers have seen sales of agricultural products dry up because of the dispute, said Trump voters are complimentary of Trump’s toughness on China but at the same time truly suffering from the trade war.

“They give Trump credit for the fight because no other president was really willing to do that, but they’re feeling pain as a result of it,” Heye said. “What we don’t know yet and we will have to find out is what is that political elasticity with those voters.”

Trump and his advisers have sought to project optimism over negotiations in recent weeks while defending the administration’s trade policies amid growing fears over the economy.

“We are doing very well in our negotiations with China,” Trump tweeted Monday, while warning Beijing that it would be “MUCH TOUGHER” to reach a trade agreement after the 2020 election.

Trade experts are increasingly doubtful the administration will be able to persuade China to sign on to a meaningful deal before the 2020 vote. A new round of U.S. tariffs went into effect on Sunday, targeting apparel, TVs and other goods produced in China, and Trump has promised to increase them next month.

“The only way you get a deal from the current situation is either for China to accept a humiliating climb down from its position, which it clearly won’t do. China is dug in now for a long conflict,” said Edward Alden, a trade and economics expert at the Council on Foreign Relations. “Or for President Trump to accept an extremely weak deal that would be heavily criticized by Democrats and members of his own party.”

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Walter Lohman, director of the Heritage Foundation’s Asian Studies Center, predicted a deal would be reached by the end of the year, pointing to the damage the trade war has done to both economies. But he said the prospect becomes increasingly unlikely as time goes on.

“I think there will be an agreement by the end of the year, and I think politics plays a part in that. I think Trump wants to be seen as a dealmaker,” Lohman said.

“I do think if they get past January, as the year goes on it gets harder and harder to do anything, and eventually if you don’t have anything before the election, it’s going to get baked into U.S. policy,” he said.

A White House spokesman told The Hill that Americans elected Trump “because they were tired of excuses and being taken advantage of by other countries.” 

“President Trump is the first President to stand up to China and send a clear message that the United States will no longer tolerate unfair trade practices that harm our great farmers, ranchers, manufacturers, and entrepreneurs,” Judd Deere said in a written statement. 

“Talks with China are continuing but there is no doubt that President Trump will continue to use every available tool to level the playing field for American workers and reduce barriers to the export of our goods and services.” 

The forthcoming weeks could be crucial for the administration as U.S. officials seek to revive negotiations with Chinese counterparts to make progress. The administration expects discussions to pick up in Washington sometime this month.

A spokesperson for the U.S. trade representative told The Hill that “both sides remain in communication at various levels,” but provided no further details on the status of current negotiations.

There is bipartisan support in D.C. for a tougher policy on China that cracks down on intellectual property theft and unfair trade practices and addresses other national security issues related to China.

Still, Trump has earned criticism for his approach to the tariffs, with experts saying that they are hurting Americans and aren’t being strategically implemented. Even members of his own party have grown weary of the economic impacts of the trade dispute. 

Trump has downplayed the impact on U.S. consumers, claiming Sunday that China is paying for “all of the tariffs” because Beijing has devalued its currency so much. 

Experts dispute those claims.

“It really is penalizing Americans more than it is the Chinese,” said Lohman. “It’s hurting American consumers, it’s hurting American manufacturing, the retaliation is hurting American farmers. There’s any number of studies out there that show that.”

As his administration pursues a deal on trade, Trump is also trying to crack down on Chinese telecommunications giant Huawei and is facing pressure to support pro-democracy protests in Hong Kong, underscoring the myriad issues he faces with respect to Beijing.  

Trump has dismissed talk of a potential recession, accusing the media of trying to harm his chances of reelection and blaming the Federal Reserve for the stock market gyrations while championing low jobless claims and other statistics as evidence the economy is doing well.

“With a booming economy, low unemployment, and rising wages, it’s clear that the President’s policy of fair and reciprocal trade along with lower taxes and deregulation are working,” Deere, the White House spokesman, said in the statement Tuesday. 

Meanwhile, consumer confidence fell 8.6 points in August, marking the largest monthly decline in almost eight years, two days before the new tariffs took effect.  

If the economy does experience a downturn amid the trade war, it will offer ammunition to Democrats ahead of 2020.

“The hardest thing for a president to run for reelection in is a difficult economy. If that’s the case, it will be difficult for Trump just because those are the political laws of gravity,” Heye said.

“If he doesn’t get a deal, it will be very easy for Democrats to be critical of Trump,” Heye continued. “That hits Trump on his brand, which is critically important to him.”

Republican strategist Colin Reed, who agreed that Trump’s trade war could risk his support among voters impacted by the tariffs, argued that Democrats’ support for a tougher China policy would make it harder for them to criticize Trump during the election campaign.

“These are the things that Donald Trump ran on,” Reed said. “I don’t think you’re going to see him back down on China, but he has a tightrope to walk for sure.”