Trade War | Beijing eyes Trump’s 2020 strategy for clues on deal

As the U.S. and China prepare to restart trade talks, few in Beijing see a clear pathway to a lasting deal.

Pessimism dominated in conversations last week with about a dozen bureaucrats, government advisers and researchers in China’s capital following the latest truce between Presidents Donald Trump and Xi Jinping. Most saw Trump’s election strategy as being the paramount factor for whether a deal was possible in the short term.

“Trump’s biggest aim is reelection in 2020,” said Wei Jianguo, former vice minister of commerce and now a vice chairman of the China Center for International Economic Exchanges. “All of his actions are aimed toward it.”

More than a year after Trump first levied punitive tariffs on Beijing, the conflict between the world’s two-largest economies has only widened as both Trump and Xi face political pressure to resist key demands from the other side. Slowing growth and threats against major companies from both countries have further raised the stakes heading into next year.

Many Chinese officials were reluctant to discuss the 2020 election out of fears they could be accused of Russian-style meddling. Yet two schools of thought emerged on Trump’s political calculus.

One was that he must deliver a deal on China heading into 2020 to please his base, and would therefore eventually relent to Beijing’s demands. The other was that he would drag things out through the campaign, particularly if the economy and stock market held up, since he faced a field of Democrats who basically agree with on getting tough with China.

Despite all Trump’s provocations over the past few years, some in China actually think he’ll give them a better deal. Trump is a pragmatist, this argument goes, and after he wins re-election he would rather make friends with China than keep battling.

This view reflects deep-seated concerns among some in the Chinese establishment about the Democrats — and particularly former presidential candidate Hillary Clinton, who served as secretary of state for four years during the Obama administration.

“The Chinese people and think tanks have bad impression of Democrats and Hillary Clinton,” said Wei, the former vice commerce minister. “The biggest problem with Trump is that he is unpredictable and doesn’t always do what he said he will do, but he gives the impression of being someone you can deal with.”

Still, another prevalent concern is whether Trump is too unpredictable to trust. While the Democrats traditionally care focus more on human rights and collaborate with allies to pressure Beijing, overall they treat China with respect and work through established institutions.

“I don’t think Xi would like to see Trump re-elected,” said Shi Yinhong, a foreign affairs adviser to the State Council and director of Renmin University’s Center on American Studies in Beijing. “Any Democrat would be less brutal.”

No matter what happens in 2020, though, most in Beijing agreed that China needs to be prepared for a protracted confrontation. There are many reasons to think that’s wise.

Chinese and American negotiators have yet to sit down for face-to-face meetings since Xi and Trump shook hands on a truce. Before they do, they’ll first need to figure out where to pick up the pieces.

Both sides differ publicly on how the talks broke down in early May, and Trump’s moves since then to both raise tariffs and blacklist telecom equipment giant Huawei Technologies Co. have narrowed the space for Xi to maneuver. Bloomberg