Donald Trump trade team’s unified front tested in China talks
Top US officials have stuck together ahead of latest round of negotiations with Beijing
In a White House that has been beset by public clashes, deep differences of opinion and rapid turnover, Donald Trump’s top trade negotiating team has largely learned how to present a unified front — adding a new dynamic to talks with Beijing.
The relative stability — despite some disagreements — marks a contrast to the open clashes that flared up in previous years among the US president’s key trade officials, and the divisions that were exposed on Mr Trump’s national security team by John Bolton’s exit last month.
“For the most part there has been greater unity on China. There have been tactical differences — certain principals were more likely to up the ante — others were more inclined to take it slower — but everyone has supported the strategy”, said Clete Willems, a former Trump administration economic official now at Akin Gump, the law firm.
“Even if certain advisers do not 100 per cent agree with certain manoeuvring, they respect the decisions once they are made and do not turn around and undermine the policy,” he said.
Robert Lighthizer, the trade representative; Steven Mnuchin, Treasury secretary; and Wilbur Ross, the commerce secretary, have been in office since the beginning of Mr Trump’s presidency in 2017. Within the White House, Peter Navarro, the manufacturing adviser, is still in place after being appointed in the early days of Mr Trump’s tenure, while Larry Kudlow, the director of the National Economic Council, has been serving for a year and a half — essentially since the opening shots of the trade war with China.
Yet as the political and economic stakes of the China stand-off grow, the 2020 presidential election campaign approaches and concerns build about slowing growth, the ability of Mr Trump’s trade team to stick together will be put to a new test, and internal tensions could flare up again.
“The evidence that the tariff war is hurting America is increasing and the evidence that the tariff war is ineffective is increasing, so how long can they be true believers?” asked Mary Lovely, a professor of economics at Syracuse University and a senior fellow at the Peterson Institute for International Economics.
With a new round of talks starting on Thursday in Washington, Chinese officials have offered limited concessions on agriculture, but are still failing to budge on some core US concerns, such as intellectual property and industrial subsidies, despite the imposition of tariffs on billions of dollars of Chinese goods.
Should Mr Trump cut a deal that calms markets but fails to secure any substantive changes to China’s economic policies, he would likely trigger the disappointment, and even ire, of more hawkish members of his team, like Mr Navarro and Mr Lighthizer.
A no-deal scenario with China, however, would likely inflict further economic damage on the US side, to farmers and manufacturers, and disturb the markets — which Mr Mnuchin and Mr Kudlow are loath to avoid. The pair are not always on the same page — while Mr Kudlow is said to be more open to measures restricting capital flows between the US and China, Mr Mnuchin is seen as more opposed, people close to the matter say.
While both are more reluctant than others to escalate tensions with China, they have been willing to consider more aggressive steps to pressure Beijing. In particular, the more moderate wing of the administration came around to the view that China’s commitments to reforming its economy could not be trusted after negotiations for a sweeping deal to end the trade fight with China broke down acrimoniously in May. That is when Mr Trump’s trade team fused, one person involved in the discussions said.
The views of the hawkish members of the administration are also more nuanced: they accepted watering down the ensuing tariff escalations announced by Mr Trump in August with exemptions for certain goods, and delays in their implementation. Even though Mr Lighthizer has long wanted to tear up and replace the US-China trade relationship, he is more pragmatic and less ideological than Mr Navarro, and has been uneasy with the imposition of levies on a vast range of consumer goods, due to hit on December 15, people briefed on the internal deliberations have said.
Mr Lighthizer is leading the talks with China jointly with Mr Mnuchin, and they mostly get along. “There’s mutual respect there, they give each other cover,” said one person close to the matter.
Meanwhile, Mr Navarro is no longer having public altercations with Mr Mnuchin, as he did outside a Chinese government building in Beijing in May 2018, nor clashing with Mr Kudlow in separate TV appearances over Wall Street’s influence in the negotiations, as he did in November 2018.
Concerns exist that the president may not be getting any pushback from his trade squad and that they may even encourage his erratic behaviour. Most officials remain convinced Mr Trump is waging a noble and overdue battle against China, and they are on board with the mission. Those who are more sceptical do not want to cross the president.
But people close to the discussions said the “wild west” atmosphere that used to define the trade team, particularly when Gary Cohn held Mr Kudlow’s role and opposed many of the protectionist policy ideas, has subsided. Whereas in those days the trade team was like a football team where every player wanted to be striker or captain, some are now settled on the idea of playing defence.
“They have been working on this thing for well over a year,” said Stephen Vaughn, former USTR general counsel under Mr Lighthizer, now at King & Spalding, the law firm.
“They communicate very well and don’t allow themselves to be pulled apart and they have made it impossible for the Chinese to play them off each other,” Mr Vaughn said. “And they are very loyal to the president.”