Trump is in desperate need of a 'win'
Donald Trump’s tweets don’t always offer a coherent story, or even a complete sentence, but a series of blasts on Thursday morning certainly shows what’s causing him to fret other than being called out on his weather forecasts. It’s the economy, stupid. Or the stupid economy. Either way, Trump is very nervous about what he’s seeing—for good reasons.
In an early-morning tweet, Trump promised that China “will be buying large amounts of our agricultural products.” This is far from the first time that Trump has made such a claim. In fact, it’s at least the third time he’s made this claim in just the last year, and that’s not counting the times he claimed that someone else was about to make a purchase equivalent to the grain and meat that China still isn’t buying. But there is a reason it’s popping out of his executive time on Thursday.
As Bloomberg reports, Trump is preparing to declare an armistice in the trade war that he started. The trade war that was going to be a “good thing” and “easy to win.” Reports are that Trump is going to offer China a temporary end to the tariffs that he has imposed if China will only agree to more protections on intellectual property rights and—this is the big one—come through with finally giving Trump a win on agricultural purchases.
The problem with this proposal isn’t just that it’s markedly worse than the trading position from which Trump started. The bigger issue is: Why should Chinese President Xi Jinping sign this deal?
Trump is in a position of weakness that couldn’t be more obvious if he was bringing a mini-blimp and some of those wiggly tube guys to the White House lawn. With economic signs forecasting a recession, farmers finally starting to realize that promises aren’t going to keep them in butter cows, and everything about Trump’s one big selling point in doubt, Trump needs this deal with China. He needs it now. And he needs it a lot more than Xi does.
As it turns out, trade wars may be easy to win. So long as they are wars against Trump.
Despite Trump’s morning tweet, the China deal isn’t anywhere near complete. This is just something his advisers are eager to drop on the table when the U.S. starts another round of trade talks with Chinese officials in the next month. For Trump to be making claims about the results of those talks now is … about as irresponsible as everything else Trump has done, and utterly typical of the disdain he’s shown toward farmers.
By absolutely no coincidence, Trump preceded his ag-tweet with one complaining about the Federal Reserve. Trump is practically screaming about the Fed’s refusal to pay people to take money. Which seems like an odd position for someone who spent his first year in the White House arguing that awarding companies with a multi-trillion tax-free bath would generate boom times. Companies didn’t just get a break on their tax rates; they were also given an absolute gift in being able to repatriate funds, something that Trump forecast would result in massive growth. Instead, just a little more than a year after the Republicans gave billionaires and corporations all the sugar they could eat, that little boost has turned out to be … a very little boost.
Since he came into office, Donald Trump has counted on the momentum of the recovery started by President Barack Obama. Growth has been shoved along by Obama’s stimulus plan, and directly improved by both the Affordable Care Act and support for renewable energy sources. But Trump deliberately set out to sabotage everything that Obama had done, for no better reason than that Obama had done it. Those actions, including his trade wars, have killed the economic momentum that was handed to him on day one.
With hints of increasing inflation, the Federal Reserve interest rate already barely above zero, manufacturing jobs definitely not returning, and the trade situation in perfect chaos, Trump has created the conditions necessary to bring back a scourge last seen decades ago: “stagflation.” That’s a condition in which the prices to consumers go up, even as economic activity is declining. It puts the Fed in a position where any attempt to lower rates can feed inflation, and any attempt to raise rates can deepen recession. In technical terms, it sucks.
So does Trump’s economic policy. He’s gotten accolades from the right to this point simply by not killing the Obama boom. But he’s been working on it, and he may finally be close to his goal of destroying everything that Obama gave the nation.
As for President Xi … his position coming into these negotiations could not be better. He could ask for more of the world’s best chocolate cake. He could ask for Mar-a-Lago. He could ask for anything, because Trump needs a win right now far more than anyone in China does.