The recent suspension of tariffs on U.S. goods by the Chinese and the announcement of an impending trade deal have been praised by President Donald Trump as “phenomenal,” but what is China’s motive for suddenly agreeing to a preliminary deal after months of escalating tariffs between the two nations?
The Chinese could be hedging their bets that Trump will be re-elected by coming to a soft deal now, instead of risking even stricter terms in future negotiations if they continue to escalate tariffs.
China announced that it would suspend tariffs that would have been implemented on U.S. goods on December 15 as the U.S. and China move toward a “phase one” trade deal. The tariffs would have primarily targeted U.S. agricultural products as well as automotive parts. China also agreed to purchase an additional $200 billion in goods and services from the U.S. (RELATED: China Nearly Doubles US Soy Bean Imports As Trump And Beijing Hammer Out Trade Deal: Report)
In return, the U.S. agreed to halt planned tariffs on Chinese electronics and toys and roll back some of the tariffs imposed on Chinese goods back in September. The deal also includes provisions that will reimpose U.S. tariffs if China does not follow through on several elements of the agreement.
Despite the reduction, the U.S. will still maintain a 25 percent tariff on $250 billion of Chinese goods, and China will maintain the tariffs that it has already placed on U.S. goods.
Trump made a tough stance on China one of the cornerstones of his 2016 presidential campaign. His promises to end Chinese trade practices that he considers unfair to the United States, and to bring manufacturing jobs back to the U.S. that were outsourced to China, resonated with American voters, especially those in the Rust Belt.
States like Michigan, Ohio and Pennsylvania, which have been hardest hit by the loss of manufacturing jobs to China, were pivotal battleground states during the 2016 presidential election and will be just as important to Trump’s re-election campaign. Agricultural states like Iowa, where farmers have been hit hard by Chinese counter-tariffs, will also play an important role in a Trump re-election.
Trump has proven that he is willing to back up his anti-China rhetoric with massive tariffs on Chinese goods, despite criticisms that the tariffs will cause significant harm to American workers and consumers, and overall American voters agree that China must be confronted. (RELATED: Who Is Winning The Trade War — The U.S. Or China?)
A Harris poll released in September found that while almost three-quarters of Americans believe that domestic consumers will bear the brunt of the negative effects from tariffs, 67 percent believe that it is necessary to stand up to China’s trade practices. However, individual policies against China received an evenly split opinion from those surveyed in the poll, with each of Trump’s tariffs garnering a 50 percent approval rating and a 50 percent disapproval rating.
Additionally, negative views of China have reached an all-time high. 60 percent of Americans have an unfavorable view of China as opposed to 24 percent who have a favorable view, according to a Pew Research poll published in August. That is up from 47 percent unfavorable in 2018. By party, 70 percent of Republicans have an unfavorable view while 59 percent of Democrats feel the same way.
In September, after announcing a new tariff on $200 billion worth of Chinese goods, Trump tweeted, “We are doing very well in our negotiations with China. While I am sure they would love to be dealing with a new administration so they could continue their practice of ‘ripoff USA'($600 B/year),16 months PLUS is a long time to be hemorrhaging jobs and companies on a long-shot….”
He added, “….And then, think what happens to China when I win. Deal would get MUCH TOUGHER! In the meantime, China’s Supply Chain will crumble and businesses, jobs and money will be gone!”
We are doing very well in our negotiations with China. While I am sure they would love to be dealing with a new administration so they could continue their practice of “ripoff USA”($600 B/year),16 months PLUS is a long time to be hemorrhaging jobs and companies on a long-shot….
— Donald J. Trump (@realDonaldTrump) September 3, 2019
….And then, think what happens to China when I win. Deal would get MUCH TOUGHER! In the meantime, China’s Supply Chain will crumble and businesses, jobs and money will be gone!
— Donald J. Trump (@realDonaldTrump) September 3, 2019
Recent polls have found that Trump is leading the Democratic presidential frontrunners in three key battleground states that were also the focus of his get tough on China campaign — Michigan, Pennsylvania and Wisconsin.
Though it may seem like a counter-intuitive strategy to come to a deal with Trump, since giving him a victory could make him more popular and validate his tough stance to the American people, China may be pursuing a more lenient deal with the Trump administration now to rob any future, tougher deal of momentum.
After all, the current details about the deal do not indicate that it is a turning point in U.S.-China trade relations. As it stands now, it suspends planned tariffs, reduces tariffs imposed in September and includes a promise from the Chinese to buy agricultural products at a level consistent with the pre-tariff level. However, this deal and a similar phase two deal provides Trump a tangible achievement that he can tout to voters, leaving little room for the president to renew his campaign against China after 2020.
The Chinese could also be pursuing a deal now to deny the Trump campaign the tough-on-China talking point, fearing that a continued fight over trade would give the president more ammunition on the campaign trail and lead to another victory in the Rust Belt.