Trump Turns Trade Talks Into Spectator Sport

Jun 13, 2019
Originally published on June 13, 2019 8:10 pm

White House economic adviser Larry Kudlow said Thursday that the Trump administration is determined to make China play by the rules of international trade.

"You know how you get from here to there?" Kudlow told an audience at a pro-trade think tank in Washington. "You kick some butt."

That's not the kind of dry, technocratic language one usually associates with trade negotiations. But it's another example of how President Trump has turned international commerce into a highly unusual spectator sport.

The next big spectacle is expected to be a faceoff between Trump and Chinese leader Xi Jinping on the sidelines of the G-20 summit in Osaka, Japan, later this month.

This "Talka in Osaka" is another high-stakes showcase for the president, who has managed to turn trade talks into must-see television. Less WTO — more WWE, complete with heroes, villains, plot twists and plenty of trash talk.

"China wants to make a deal very badly," Trump told reporters this week. "It's me, right now, that's holding up the deal."

Trump said that before he took office, "China ate the United States alive, economically." The president has imposed steep tariffs on Chinese imports. And he's threatened to go further if China won't throw in the towel.

Like last week's tariff battle with Mexico, the showdown with China has kept the president on the front page, sent shock waves through the stock market, and turned dusty rules of international commerce into a hot topic around the dinner table.

"There will be no shortage of conversations in the early summer barbecues, boy, with people looking at their portfolios," said Matthew Slaughter, a Dartmouth economist who studies international trade.

Trump has not only put trade front and center in the national conversation. Because the president is such a polarizing figure, he has managed to scramble the usual partisan cheering sections. Some Republicans are now defending tariffs and other protectionist measures while some Democrats are pushing in the opposite direction.

"There's some Democrats who are now saying, 'Boy, we need to be careful on levying these new trade barriers and we need to worry about trade wars,' " said Slaughter, who served in the George W. Bush White House. "The president and his policies are starting to muddy those waters again."

A Quinnipiac poll last month found 53% of all Americans disapprove of the president's handling of trade, while just 39% approve. The poll was taken about a week after talks between the U.S. and China broke down and Trump increased tariffs on some $250 billion worth of imports.

"Right now, China is paying us billions and billions of dollars," Trump said. "They never gave us 10 cents."

Never mind that most economists say the tariffs are largely paid by American businesses and consumers. Meanwhile, China has raised tariffs of its own on U.S. exports, while cutting the taxes on products it buys from other countries.

Kudlow calls himself a free trader but said he has come around to the president's view that tariffs can be a useful economic weapon.

"It's a negotiating tool, but it's not a bluff," Kudlow said. "As you've seen, he will actually execute or implement tariffs."

A member of the audience asked Kudlow what happens if Trump's tariffs don't deliver a knockout punch. What if, instead, the two sides settle into a costly, rope-a-dope trade war?

Kudlow didn't have a ready answer for that. The think tank's director emeritus, Fred Bergsten, observed that for much of the past century, the U.S. has gone largely unchallenged in the global ring. In China, it is finally facing another economic heavyweight.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

AUDIE CORNISH, HOST:

White House economic adviser Larry Kudlow said today that the Trump administration is determined to make China play by the rules of international trade.

(SOUNDBITE OF ARCHIVED RECORDING)

LARRY KUDLOW: You know how you get from here to there? You kick some butt. You kick some butt.

CORNISH: That's not the kind of dry, technocratic language one usually associates with trade talks. But it's another example of how President Trump has turned to international commerce into a highly unusual spectator sport. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: The next big matchup in the U.S.-China trade tussle is expected to be a face-off between President Trump and his Chinese counterpart, Xi Jinping. No formal meeting has been scheduled yet, but there's been plenty of buildup for the expected showdown at the G-20 summit in Osaka, Japan, a week from Saturday. You could almost imagine a TV promotion.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON: (As announcer) Saturday, Saturday, Saturday - be ready for an epic pounding.

HORSLEY: It's another high-stakes showcase, this "Talka in Osaka," for a president who's managed to turn trade talks into must-see television - less WTO, more WWE - complete with heroes, villains, plot twists and plenty of trash talk.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON: (As announcer) Fight fans, are you ready?

HORSLEY: Earlier this week, Trump declared that China, quote, "ate the United States alive, economically" before he took office. The president's retaliated with steep tariffs on Chinese imports. And he's threatened to go further if China won't throw in the towel.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: China wants to make a deal very badly. It's me right now that's holding up the deal.

HORSLEY: Like last week's tariff battle with Mexico, the showdown with China has kept the president on the front page, sent shockwaves through the stock market and turned dusty rules of international commerce into a hot topic around the dinner table.

MATTHEW SLAUGHTER: There'll be no shortage of conversations in the early summer barbecues for people looking at their portfolios.

HORSLEY: Dartmouth economist Matthew Slaughter, who served in the George W. Bush White House, says Trump has managed to put trade front and center in the national conversation. And because the president himself is such a polarizing figure, he's managed to scramble the usual partisan cheering sections. Some Republicans are now defending tariffs and other protectionist measures while some Democrats are pushing in the opposite direction.

SLAUGHTER: There's some Democrats who are now saying, boy, we need to be careful on levying these new trade barriers, and we need to worry about trade wars. The president and his policies are starting to muddy those waters again.

HORSLEY: A Quinnipiac poll last month found more than half of all Americans disapprove of the president's handling of trade while just 39% approve. That poll was taken about a week after talks between the U.S. and China broke down and Trump boosted tariffs on some $250 billion worth of Chinese imports.

(SOUNDBITE OF ARCHIVED RECORDING)

TRUMP: Right now China is paying us billions and billions of dollars. They never gave us 10 cents.

HORSLEY: Never mind that most economists say those tariffs are largely paid by American businesses and consumers or that China has raised tariffs of its own on U.S. exports. White House economic adviser Larry Kudlow talked about the standoff today at a pro-trade think tank here in Washington. Kudlow calls himself a free trader but says he's come around to the president's view that tariffs can be a useful economic weapon.

(SOUNDBITE OF ARCHIVED RECORDING)

KUDLOW: It's a negotiating tool, but it's not a bluff. As you've seen, he will actually execute or implement tariffs.

HORSLEY: A member of the audience asked Kudlow, what happens if Trump's tariffs don't deliver a knockout punch? What if instead the two sides settle into a costly, rope-a-dope trade war? Kudlow didn't have a ready answer for that. A senior fellow at the think tank observed that for much of the last century, the U.S. has gone largely unchallenged in the global ring. In China, it's finally facing another economic heavyweight.

Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.