by Salman Rafi Sheikh, …with New Eastern Outlook, Moscow,
…and the Institute of Oriental Studies of the Russian Academy of Sciences, a research institution for the study of the countries and cultures of Asia and North Africa.
[ Editor’s Note: The US-China trade deal “showdown” is now revealed as much less than that. China knew Trump had his feet in the fire, not the Chinese, who are not up for election this year.
Because the negotiations were taking so long, we lowly citizens assumed that it was going to be a long term trade deal, right? Wrong. It’s just for two years, with China buying the same things they usually have, but where we were led to believe would be higher amounts, which were published. The tough parts were pushed over into stage two, where the 2020 election will be over before they are finished.
But Mr. Sheikh informs us today that those US purchase amounts are, we are told by the Chinese Premier, “based on the market demand in China”, something that makes perfect sense. Who wants to commit to something to buy where the need can fluctuate?
So that makes is it a “maybe deal”, maybe we will, maybe we won’t. But Trump did get something he really wanted, politically, some farmer relief in three key swing states that that put him over the top in 2016 with 80,000 voters (or “flipped” voters), as the case may be.
This report below on “farm bankruptcies” is hard to follow without more details. We would need to know if these are smaller family farms on their last legs, which mega farmers have been putting into bankruptcy for a few decades now,, or are they some of the biggies, with major jobs impact?
This stage one deal could have been done in the fall. I suspect Trump stalled as he wanted it before his February 5th state of the union address and the anticipated impeachment trial as a news diversion. We already had an earlier diversion with the Soleimani assassination that blew up in his face. Americans polled that they felt war was more imminent.
Would Trump administration people try to time such events to benefit from them most politically? Does a bear poop in the woods? Next up will be what everybody knows will be a Trump impeachment acquittal as there never was any chance of a two thirds vote for conviction in the Senate.
Trump will then begin his 2020 campaign claiming to have been vindicated. Watch for all kinds of new legislation, all designed to buy votes to assure his victory. And while he will still have his base with him, the impeachment polls showed the over half of us wanted him removed.
At this point I think independents could hold his 2020 fate in their hands, theoretically. My caveat there is what states they are in is key, and then how much vote flipping is done compared to 2016. Notice how nothing is published about domestic computerized vote rigging anymore with all the diversion news thrown at us every day… Jim W. Dean ]
– First published … January 01, 2020 –
On January 15, the US president signed a ‘historic’ trade deal with China in the White House. Strangely enough, the deal was signed by the US president himself despite the fact that his Chinese counterpart was not there. From the Chinese side, China’s Vice premier, a foreign dignitary far below in protocol, signed the deal.
Why did Trump want to sign the deal himself? One important reason for this is his bid to project himself as a ‘deal maker’—a projection that he intends to use in his re-election bid.
Trump’s own presence also shows that the deal was important for him not only economically, but also politically at a time when he is facing impeachment, although chance of its success are minimum. While Trump boasted this deal off as a US victory, a close reading shows that this is far from the case.
If anything, the fact that Trump had made a deal shows that the underlying objective of trade-war China i.e., crushing the Chinese economy, has not been achieved. On the other hand, loses caused by this trade-war to the US economy could have damaged Trump’s political reputation irreparably if he had continued to wage it.
As a matter of fact, what Trump calls a “US victory” is only an agreement that lets China buy US products—things that it has always wanted to buy and was already buying before Trump began the war.
Ironically enough, China’s purchases are going to be as much only as they were in 2017, including $52.4 billion of energy exports, $32 billion of agricultural commodities, $77.7 billion of manufactured goods and $37.9 billion of services.
Secondly, why this cannot be an American victory is the fact China has made commitment only for the next two years. What happens after two years is unclear in as much as no practical arrangements for a long-term implementation of the ‘deal’ have been spelt out.
And, while the ‘deal’ allows China to buy US products, the Chinese premier made it clear that China will buy goods “based on the market demand in China,” suggesting Beijing may not view the targets as so ironclad. One reason, perhaps, for this is China’s contracts with other countries.
And, while US states where agricultural produce is high did vote for Trump in the 2016 elections, Trump’s ‘triumphant deal’ seeks mainly to make amends to the farmers, a US economy sector most hit by Chinese retaliations.
After China’s decision to stop buying US agricultural products, American Farm Bureau Federation President Zippy Duvall was reported to have said that this decision “is a body blow to thousands of farmers and ranchers who are already struggling to get by.” This did work for China, but not for president Trump both politically and economically.
According to a report of US Farm Bureau, farm bankruptcies are on the rise in the US since 2018. Farm bankruptcies are up 24% from the prior year and the highest level since 676 filings in 2011, becoming a big reason for the US president to worry that might bit him hard in the elections if the Chinese continue to stay away from the US products, and hide behind the ‘demand any supply’ caveat.
That the deal was meant to cover up loses in the agriculture department and that it has clear political underpinnings for Trump is evident from the way the states that voted for Trump in 2016 are also the states where farm bankruptcy is the highest. Consider this: farm bankruptcies are highest in Wisconsin, Georgia, Nebraska.
And, all of these states had voted for Trump in 206 elections. In Wisconsin, Trump had won 47.8 per cent of votes. In Georgia, Trump had won 51 per cent of votes. In Nebraska, Trump had won 59.9 per cent of votes, and in Kansas, Trump had won 57 per cent of votes. In 2018-19, there were 48 bankruptcies in Wisconsin; 37 in Georgia, Nebraska and Kansas.
All of these states experienced bankruptcy filings at or above 10-year highs, undoubtedly depicting a grim result of Trump’s ‘trade war’ with China, and how that ‘trade-war’ has directly hit Trump’s own vote bank.
It was clearly a misconceived war that Trump had waged, and had to blink first now in order to save his voters; hence, the explanation: Trump has not been able to beat China economically. On the contrary, Chinese retaliation was powerful enough to shake Trump’s political foundations from its core.
While Trump had tried to assuage the fears of the farmers through $28 billion in aid for farmers affected by the tariffs, this led to yet another politically and economically counter-productive situation whereby 40% of farm profits this year are expected to come from federal assistance, signalling how critical the situation had become for Trump before he decided to sign the deal.
It also clearly explains why Trump wanted to sign the deal himself. The intention, in simple and plain words, was to speak to his farmer voters and show them how ‘mindful’ of their problems he really is, and that only he could have done such a deal (although it is hard to forget that only he could have caused the damage in the first place).
Nonetheless, Trump’s projection of the deal as a “US Victory” signals how he intends to use it. In his election campaign, he is most certainly going to sell his ‘tough stance’ on China, and how it has ‘paid off’ in terms of ensuring a consistent Chinese purchase of US agricultural products.
Of course, a necessary nuisance that Trump will have to counter will be Chinese refusal to buy these products because of ‘lack of demand.’ As such, while the deal might have paid off in terms of a cease-fire, it might not pay off on the elections day.
Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook”.