Media  Global Economy  2018.08.13

Trump's trade war continuing with no end in sight - The President, seeing himself as a businessman, won't compromise on commerce or trade even if compromising on diplomacy or national security

The article was originally posted on Webronza on July 29, 2018

Trump looked sheepish in meeting with Putin

How could a global trade war be stopped? The G20 Finance Ministers and Central Bank Governors Meeting in Argentina on July 21-22 attracted attention but produced few significant results as almost everyone expected.

This is a matter of course. It is US President Trump that is carrying out this trade war. Unless he gives up, the trade war won't end. US Treasury Secretary Mnuchin, joining the G20 Meeting, has no power to make a change.

The press conference held when President Trump talked with Russian President Putin on July 16 and the confusion in the United States after this talk highlighted the Trump administration's abnormal way of decision-making. Let's anticipate President Trump's future course of action on trade issues while contrasting it with this affair.

This talk with Putin was originally bulled by Trump over objections from the US administration. Unlike at the North Korea-United States summit, Putin sat fat after keeping Trump waiting for more than 30 minutes, while Trump looked sheepish and displayed some impressive brown-nosing.

Not only I but also my friend, an American political scientist, got the same impression. The latter compared Trump to a medium-size dog asserting its superiority over a small dog while laying itself out in obedience in front of a large dog. I also hear a rumor that people in the United States believe Putin has some dirt on Trump.

Trump's lame explanation

As to relations with Russia, the following are drawing increasing attention in the United States: 1) whether Russia interfered with the United States presidential election of 2016 to prevent Clinton from being elected, and 2) whether the Trump camp connived with Russia in the interference.

Concerning 1), Special Counsel, Robert Mueller, prosecuted 12 Russian military intelligence service officials for interfering with the election, and most persons concerned with the executive and the legislature have no doubt of that. Special Counsel Mueller is investigating into 2). Meanwhile, President Trump has criticized this Russia-gate as a witch-hunt for some time.

Of course, President Putin denied Russia's interference strongly at the press conference. This was endorsed by US President Trump, since the Trump camp's involvement wouldn't exist if there was no interference.

However, even Republican lawmakers in the ruling party expressed strong criticism of Trump's confidence in the adversary Putin instead of the domestic intelligence service. Accordingly, after returning to the US, Trump was forced to give the lame explanation that he had said one word wrong, thus affirming what he should have denied.

In addition, at the press conference, Putin proposed the Russian investigative authority's examination of the former American ambassador to Russia and others in return for the US investigative authority's examination of the 12 Russian military intelligence service officials that had been prosecuted by Special Counsel Mueller. Trump immediately praised it as a brilliant proposal. He probably evaluated it as a good deal.

However, it is a matter of course that Americans who were not crime suspects but are protected by diplomatic immunity should not be examined by a foreign investigative organization. After the President's return, the White House first evaluated this proposal, but ultimately rejected it because of opposition from the State Department.

The President's "arbitrary actions without consultation" and the government's "denial"

Above all, it is the two presidents' statements at the press conference that stand out. Even Coats, Director of National Intelligence and head of the Intelligence Community, said he was not informed of what exchanges had taken place during the private two-hour talk between just the two leaders.

Normally, after a talk with few participants, the participants report the exchanges to other government officials to share information in the government. This is called debriefing in diplomacy terms. After a tete-a-tete (head-to-head in French) summit talk, debriefing should be conducted as a matter of course. However, the Trump administration doesn't seem to make such basic confirmations.

In addition, although the talk with Putin was assessed as terrible in the United States, President Trump invited Putin to visit the United States this coming fall. This means that he invited the Russian president to come to the United States just before the midterm election even though the US intelligence service asserts Putin will continue to interfere with elections.

Moreover, even such an important detail was not communicated to Coats, Director of National Intelligence. Coats didn't know until the press reported it after the White House's announcement. President Trump (and his followers) probably acted arbitrarily without consultation.

If a normal administration makes an important decision, the heads of relevant agencies of the government circles and presidential aides gather at the White House to analyze advantages and disadvantages and exchange opinions, and then the President makes a decision. From the summit talk with Putin, it can be seen that Trump makes an arbitrary decision on the Trump administration's security policies without full analysis or exchange of opinions in the administration, and the government denies the decision if it receives strong criticism or creates confusion.

Face as a businessman

Even if Trump makes a wrong decision, it does little damage when correction is made later. However, it cannot be expected that Trump will accept the government's "correction" in commerce or trade issues.

First, Trump is a complete amateur in diplomacy and national security. He has no knowledge or confidence that would enable him to self-correct when he makes a mistake.

On the other hand, Trump sees himself as a businessman. If he withdraws or corrects his view or policy in commerce or trade issues, he will lose face.

Second, most Americans excluding Trump think it is an obvious fact that Russia interfered with the presidential election of 2016 and that Putin, supporting the interference, is an adversary of the United States. In other words, US public opinion doesn't support Trump in diplomacy or national security issues.

However, in commerce or trade issues, Trump has strong support among white workers in the Rust Belt. By making an issue of threats to employment by trade or immigrants, Trump won the presidential election. This is the foothold of the administration's legitimacy Trump believes. Doubting this is nothing less than denial of the administration's legitimacy.

Until Trump's supporters lose jobs and distance themselves from Trump

Now 90% of Republican supporters are supporting Trump. This is the highest support rating since President Bush Senior just after the Gulf War. Although President Trump's public support rating of 40% is low among the past presidents, this support is solid as bedrock. Even the confusion after the talk with Putin has not affected President Trump's support rating in the least. Even Democrat supporters have come to think that Trump may be re-elected in the presidential election of 2020 with this support.

As with diplomacy or national security, Trump makes arbitrary decisions in commerce or trade issues. Aides cannot say the right thing because they would earn Trump's displeasure and would be alienated if they remonstrated with him (and unfortunately Trump seems to get fewer competent aides in commerce or trade than in diplomacy or security).

However, unlike in diplomacy or national security, Trump will never change his views in commerce or trade issues as long as he has solid support among Republican supporters even if he receives strong criticism from foreign leaders or domestic political/economic leaders (I guess he will raise tariffs on automobiles in accordance with the initial policy even if the domestic automobile industry opposes the raise).

No matter how many times Trump fails in diplomacy or security, as long as voters believe that jobs in the United States can be protected by the Trump administration's policies on trade or immigrants, support for Trump will remain solid. Trump could change his views only if his commerce or trade policies cause a large decline in jobs in the United States and voters' support for him is shaken.

When will that time come, before the midterm election of this year, or after the presidential election of 2020?

(This article was translated from the Japanese transcript of Dr. Yamashita's column in "Webronza" on July 29, 2018.)