What if Trump has no intention of making a trade deal with China?

[ChpBstrd]

Everyone seems to assume that Trump’s purpose with his trade wars - particularly with China - is to negotiate and take credit for some grand deal. However, what if his actual objective is to replace part of the income tax with tariff revenue? Prior to the start of the federal income tax in 1913 (I.e. the end of the “gilded age”) the federal government got almost all of its revenue from tariffs. I’ve heard conservatives bring up this point before in discussions on ending the income tax. I’ve also heard them talk about the need for the US to be self sufficient in agriculture, fossil fuel production, and manufacturing - as the US was in that era.

What if the whole point of the trade negotiations is for them to fail, and to do so in a way that allows Trump to enact a shift in taxation from income to tariffs, and to blame China for any recession or inflation that occurs as a result? If extended, high tariffs = recession, then this would mean we are having a recession, stock market optimism notwithstanding.

How would you invest in a world shifting in such a way? Global corporations would be badly hurt. The tech monopolies might find their overseas expansions cut off. Cash would buy fewer and fewer imports and overall inflation could skyrocket.

[marty998]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

[bacchi]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

A 100% tariff on everything would do it.

[ChpBstrd]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

That’s why I think the endgame might be to replace “part of” the federal income tax.

[bwall]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

A 100% tariff on everything would do it.

Who wants to pay twice as much for everything? That would create a lot of paupers overnight with no real benefit for the average Joe.

I think that he will not sign any deal with China before the election. Then he won't be running against Dems for re-election. He'll be running against China. From his point of view, not the worst strategy to employ--to the extent that he's capable of employing any strategy at all.

[scottish]

You're over-thinking the mighty Trump.   Here is his objective:

Trump’s purpose with his trade wars - particularly with China - is to negotiate and take credit for some grand deal.

[lost_in_the_endless_aisle]

Who knows what Trump believes--John Bolton is likely the one pulling the levers here and he believes China poses a serious geopolitical threat to the long-term interests of the US and its allies. In between segments of Fox and Freinds--during various commercials peddling catheters--I'm sure he shouted some very meaningful words into Trump's ear and got his approval on pursuing this anti-China scheme. Some (like Gordon Chang and Peter Zeihan) have argued China is much weaker than it appears, especially given its opaque internal finances and goal of maintaining rapid economic growth via credit expansion in spite of the questionable returns on those underlying investments. Of course, bold projections of impending Chinese collapse could be easily overstated in an effort to sell books--however, there may some financial strain already forming. Speaking of Bolton, he seems to be trying to leverage the UK's awkward position with respect to Brexit with the enticement of a trade deal to enhance the US's hard-line on China & Iran.

[former player]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

A 100% tariff on everything would do it.

No, because the tariff money is just being paid straight over to the farmers, right?

[Adam Zapple]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

A 100% tariff on everything would do it.

Who wants to pay twice as much for everything? That would create a lot of paupers overnight with no real benefit for the average Joe.

I think that he will not sign any deal with China before the election. Then he won't be running against Dems for re-election. He'll be running against China. From his point of view, not the worst strategy to employ--to the extent that he's capable of employing any strategy at all.

I also doubt China will sign anything with Trump before the next election in hopes of getting someone else in office they can work with. 

[ChpBstrd]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

A 100% tariff on everything would do it.

Who wants to pay twice as much for everything? That would create a lot of paupers overnight with no real benefit for the average Joe.

I think that he will not sign any deal with China before the election. Then he won't be running against Dems for re-election. He'll be running against China. From his point of view, not the worst strategy to employ--to the extent that he's capable of employing any strategy at all.

I also doubt China will sign anything with Trump before the next election in hopes of getting someone else in office they can work with.

The tell-tale sign that permanent tariffs are the plan will be if the 2021 budget is written in a way that assumes tariffs will contribute a significant percentage of revenue. DT would love to put the Dems in a position where they have to either agree with him or advocate for both lowering tariffs on China and undoing a recent tax cut to pay for it. Even in the agony of a recession that will be a tough position to take, and free trade has never been a core principle for Democrats anyway. The election could actually lock in the tariff policy.

That’s the short term impact. Long-term, as in over a decade, will the US be poorer? Will the free trading countries in the world outperform the tariff-based countries, as predicted by economic theory?

[ChpBstrd]

Trump’s abandonment of the Trans Pacific Partnership strikes me as the giveaway of his position. The TPP offered:

a) an avenue to reduce Chinese industrial domination,
b) a mechanism to obtain info on SOE’s,
c) intellectual property protections,
d) a trade dispute resolution body

...which is to say Trump already walked away from all he claims to be negotiating for - at least with the TPP/CPATPP members. What he actually wants is a tariff system that applies to all trade.

https://en.m.wikipedia.org/wiki/Comprehensive_and_Progressive_Agreement_for_Trans-Pacific_Partnership

That said, he basically settled for a reboot of NAFTA when the agriculture and auto industries informed him they would go bankrupt if their international value chains were disrupted by tariffs. Expect a return to Mexico and Canada after Trump declares that the Chinese were unwilling to negotiate.

[Blueberries]

Everyone seems to assume that Trump’s purpose with his trade wars - particularly with China - is to negotiate and take credit for some grand deal. However, what if his actual objective is to replace part of the income tax with tariff revenue? Prior to the start of the federal income tax in 1913 (I.e. the end of the “gilded age”) the federal government got almost all of its revenue from tariffs. I’ve heard conservatives bring up this point before in discussions on ending the income tax. I’ve also heard them talk about the need for the US to be self sufficient in agriculture, fossil fuel production, and manufacturing - as the US was in that era.

What if the whole point of the trade negotiations is for them to fail, and to do so in a way that allows Trump to enact a shift in taxation from income to tariffs, and to blame China for any recession or inflation that occurs as a result? If extended, high tariffs = recession, then this would mean we are having a recession, stock market optimism notwithstanding.

How would you invest in a world shifting in such a way? Global corporations would be badly hurt. The tech monopolies might find their overseas expansions cut off. Cash would buy fewer and fewer imports and overall inflation could skyrocket.

This is a very simplistic answer to a complex problem, but how would I invest?  Well, considering he would likely lose in 2020, I'd invest as I normally do and wait for the next President who will be far more competent and educated (no matter the choice). 

ETA:  I recognize this is a cop out answer of sorts.  But, if you're really asking how people would invest, my answer is my investments wouldn't change.  It only takes looking at a historical chart to realize this issue will be just another marker on an otherwise long list of issues the country (and world) economy has faced and overcome.  I choose to view it optimistically. 

[Jimbo]

People were saying similar things in Canada when Nafta was being 'redesigned' and now we have 'Nafta' with a new name. Somehow Trump thinks he invented sliced bread with that one.

I think he is much more likely to want to sign something in the spring/summer 2020 to boost the stock market leading to (he hopes) his reelection. I would not be shocked if China stalls talks at that point and basically waits for winter 2021.

But then again, the whole world is eagerly waiting for January 2021.

[ChpBstrd]

People were saying similar things in Canada when Nafta was being 'redesigned' and now we have 'Nafta' with a new name. Somehow Trump thinks he invented sliced bread with that one.

I think he is much more likely to want to sign something in the spring/summer 2020 to boost the stock market leading to (he hopes) his reelection. I would not be shocked if China stalls talks at that point and basically waits for winter 2021.

But then again, the whole world is eagerly waiting for January 2021.

I’ve considered this timing angle too. Maybe DT is betting the tariff-induced market volatility of 2018-19 will convince the fed to lower rates, and then he will push a tax cut to help consumers cope with tariff-induced higher prices, and then just as recession seems imminent he will sign whatever deal is on the table in the summer of 2020, creating a huge artificial stock rally and ensuring his re-election. The market has been moving based on tweets all year.

Of course, if a recession hits right about that time, 2020 could be the political equivalent of 2008. Only a narcissist like DT could even think he had the power to manipulate the timing of a recession. However, DT has a history of making unorthodox moves with risks for enormous collateral damage when such moves offer the only hope of winning. Disrupting the world economy for 2 years just so he can undisrupt it in year 3 might just work, because people have short memories and limited economic understanding.

This theory is the opposite of the theory noted earlier, but note that in either case the next 12 months will be bumpy.

[lost_in_the_endless_aisle]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

A 100% tariff on everything would do it.

Who wants to pay twice as much for everything? That would create a lot of paupers overnight with no real benefit for the average Joe.

I think that he will not sign any deal with China before the election. Then he won't be running against Dems for re-election. He'll be running against China. From his point of view, not the worst strategy to employ--to the extent that he's capable of employing any strategy at all.

I also doubt China will sign anything with Trump before the next election in hopes of getting someone else in office they can work with.

The tell-tale sign that permanent tariffs are the plan will be if the 2021 budget is written in a way that assumes tariffs will contribute a significant percentage of revenue. DT would love to put the Dems in a position where they have to either agree with him or advocate for both lowering tariffs on China and undoing a recent tax cut to pay for it. Even in the agony of a recession that will be a tough position to take, and free trade has never been a core principle for Democrats anyway. The election could actually lock in the tariff policy.

That’s the short term impact. Long-term, as in over a decade, will the US be poorer? Will the free trading countries in the world outperform the tariff-based countries, as predicted by economic theory?

I used to believe the more orthodox free-trade narrative of economics but now I believe that there is a strong path-dependency to determine what comparative advantages a country has in the first place. In the short term, yes, free trade is better for everyone, but in the long run, it's not so clear that is optimal and what decision criteria can adequately determine when a country should invoke trade barriers.

Then there is the more directly geopolitical considerations at play with respect to national industrial policy: Bruno Maçães makes an interesting point in contrasting Europe's approach to the "Eurasian" one in Dawn of Eurasia where German officials are rather sanguine about Chinese interest in buying German robotics and microchip companies, not regarding such acquisitiong as any sort of national concession nor related in any way to potential future means by which China could exert its power (since China's economic power and industrial policy is so closely intermingled with its state power). To its credit, at least the US is now engaging China on terms that are mutually comprehensible; Europe on the other hand (according to Maçães):

...the European political order evolved in a protected ecosystem. It is now so advanced and complex that it has lost any claim to universality and European citizens can hope for nothing more than to preserve it from external disturbances. Rather than aspiring to change the world and make it safe for European values, they now want to be left alone. Brussels' grand strategy starts to resemble that of the Qing dynasty in China

[J Boogie]

Who knows what Trump believes--John Bolton is likely the one pulling the levers here and he believes China poses a serious geopolitical threat to the long-term interests of the US and its allies. In between segments of Fox and Freinds--during various commercials peddling catheters--I'm sure he shouted some very meaningful words into Trump's ear and got his approval on pursuing this anti-China scheme. Some (like Gordon Chang and Peter Zeihan) have argued China is much weaker than it appears, especially given its opaque internal finances and goal of maintaining rapid economic growth via credit expansion in spite of the questionable returns on those underlying investments. Of course, bold projections of impending Chinese collapse could be easily overstated in an effort to sell books--however, there may some financial strain already forming. Speaking of Bolton, he seems to be trying to leverage the UK's awkward position with respect to Brexit with the enticement of a trade deal to enhance the US's hard-line on China & Iran.

You seem to be picking up many of the same frequencies as I do, but we have differing views on this.

I think Trump has demonstrated he doesn't really care what his advisers have to say if he has a gut feeling on something.

Early on in campaigning China was one of the key reasons he identified that America was losing. America was losing because China was winning, and cheating to win. He also mentioned that the US has long been contributing too much to NATO and our allies need to pick up some slack.

There's a decent amount of truth there. His tough talk on China while campaigning was no surprise; tons of candidates do that. And then they back down when they get elected. They know the havoc it could wreak on markets. Trump has a pretty big tolerance for haters and low polling numbers (even if he disputes them) and so he is in some ways one of the only presidents that has the stomach to stand up to China and risk tanking the market.

Why would it be worth the risk? The simple answer is that the world (and of course the US) is far better off with the US being the dominant economic superpower instead of China. China has manipulated its currency and executed a very focused effort on economic strength. Many suspect their goal was to de-industrialize other nations and that's probably not wrong.  China's been averaging YOY double digit GDP growth since 1979, and they have leveraged their economic strength to expand their military footprint in disputed areas of the South China Sea. It would be foolish to think China is not interested in dominance.

The question then becomes when do we take action to prevent China from overtaking us? When each president has to factor in their own popularity and re-electability (during the first term) there are perverse incentives to kick the can down the road and focus on a more easily winnable legacy achievement.

It's kind of strange to assume that Trump is some type of obscure wonky paleo-conservative interested in supplanting the income tax. No, he just understands at a gut level that he cannot let China overtake the US as the economically dominant nation and so he's putting the screws to them as their growth story is slowing.

Obviously, Trump is otherwise a distractable and fear-mongering demagogue, so there's a temptation to write off all of his domestic and foreign policy gut feelings as hateful idiocy - but I think the blind squirrel has found the right nut on this one. If China wasn't so authoritarian and bent on gaining strength, I wouldn't feel this way. But I don't want dictator for life Xi Jinping calling the shots. I'd rather have the US with its constitution, checks and balances, and relatively superior human rights record calling the shots. And yeah, I'm a US citizen so I admit I'm a little biased.

[ChpBstrd]

Who knows what Trump believes--John Bolton is likely the one pulling the levers here and he believes China poses a serious geopolitical threat to the long-term interests of the US and its allies. In between segments of Fox and Freinds--during various commercials peddling catheters--I'm sure he shouted some very meaningful words into Trump's ear and got his approval on pursuing this anti-China scheme. Some (like Gordon Chang and Peter Zeihan) have argued China is much weaker than it appears, especially given its opaque internal finances and goal of maintaining rapid economic growth via credit expansion in spite of the questionable returns on those underlying investments. Of course, bold projections of impending Chinese collapse could be easily overstated in an effort to sell books--however, there may some financial strain already forming. Speaking of Bolton, he seems to be trying to leverage the UK's awkward position with respect to Brexit with the enticement of a trade deal to enhance the US's hard-line on China & Iran.

You seem to be picking up many of the same frequencies as I do, but we have differing views on this.

I think Trump has demonstrated he doesn't really care what his advisers have to say if he has a gut feeling on something.

Early on in campaigning China was one of the key reasons he identified that America was losing. America was losing because China was winning, and cheating to win. He also mentioned that the US has long been contributing too much to NATO and our allies need to pick up some slack.

There's a decent amount of truth there. His tough talk on China while campaigning was no surprise; tons of candidates do that. And then they back down when they get elected. They know the havoc it could wreak on markets. Trump has a pretty big tolerance for haters and low polling numbers (even if he disputes them) and so he is in some ways one of the only presidents that has the stomach to stand up to China and risk tanking the market.

Why would it be worth the risk? The simple answer is that the world (and of course the US) is far better off with the US being the dominant economic superpower instead of China. China has manipulated its currency and executed a very focused effort on economic strength. Many suspect their goal was to de-industrialize other nations and that's probably not wrong.  China's been averaging YOY double digit GDP growth since 1979, and they have leveraged their economic strength to expand their military footprint in disputed areas of the South China Sea. It would be foolish to think China is not interested in dominance.

The question then becomes when do we take action to prevent China from overtaking us? When each president has to factor in their own popularity and re-electability (during the first term) there are perverse incentives to kick the can down the road and focus on a more easily winnable legacy achievement.

It's kind of strange to assume that Trump is some type of obscure wonky paleo-conservative interested in supplanting the income tax. No, he just understands at a gut level that he cannot let China overtake the US as the economically dominant nation and so he's putting the screws to them as their growth story is slowing.

Obviously, Trump is otherwise a distractable and fear-mongering demagogue, so there's a temptation to write off all of his domestic and foreign policy gut feelings as hateful idiocy - but I think the blind squirrel has found the right nut on this one. If China wasn't so authoritarian and bent on gaining strength, I wouldn't feel this way. But I don't want dictator for life Xi Jinping calling the shots. I'd rather have the US with its constitution, checks and balances, and relatively superior human rights record calling the shots. And yeah, I'm a US citizen so I admit I'm a little biased.

I’d say either of the above comments could be aligned with a theory that DT wants to supplant some of the income tax with tariffs, or a theory that he is timing the economic damage he is causing around elections. Such goals can converge and win the support of various stakeholders. The truth could be all of the above.

Yet, if DT was committed to the freedoms, checks and balances, and limitations on leaders that characterize the American form of government, he might not demonstrate such authoritarian tendencies himself (although perhaps he might be committed to US dominance because it’s the team he is on.). And if he was committed to checking the rise of China, joining the TPP and expanding trade with Europe while establishing tariffs on China would have been logical ways to do that (although there might be a phase 2 in his plans). The administration’s behavior is so inconsistent, it leaves us speculating about the underlying motives. Of course, the administration could be incompetent in the pursuit of its own motives. Herbert Hoover actually thought he was doing the right things to end the Great Depression when he raised tariffs, tightened the money supply, and let banks collapse. Could be that DT is operating under a similarly incorrect worldview.

[ChpBstrd]

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

A 100% tariff on everything would do it.

Who wants to pay twice as much for everything? That would create a lot of paupers overnight with no real benefit for the average Joe.

I think that he will not sign any deal with China before the election. Then he won't be running against Dems for re-election. He'll be running against China. From his point of view, not the worst strategy to employ--to the extent that he's capable of employing any strategy at all.

I also doubt China will sign anything with Trump before the next election in hopes of getting someone else in office they can work with.

The tell-tale sign that permanent tariffs are the plan will be if the 2021 budget is written in a way that assumes tariffs will contribute a significant percentage of revenue. DT would love to put the Dems in a position where they have to either agree with him or advocate for both lowering tariffs on China and undoing a recent tax cut to pay for it. Even in the agony of a recession that will be a tough position to take, and free trade has never been a core principle for Democrats anyway. The election could actually lock in the tariff policy.

That’s the short term impact. Long-term, as in over a decade, will the US be poorer? Will the free trading countries in the world outperform the tariff-based countries, as predicted by economic theory?

I used to believe the more orthodox free-trade narrative of economics but now I believe that there is a strong path-dependency to determine what comparative advantages a country has in the first place. In the short term, yes, free trade is better for everyone, but in the long run, it's not so clear that is optimal and what decision criteria can adequately determine when a country should invoke trade barriers.

Then there is the more directly geopolitical considerations at play with respect to national industrial policy: Bruno Maçães makes an interesting point in contrasting Europe's approach to the "Eurasian" one in Dawn of Eurasia where German officials are rather sanguine about Chinese interest in buying German robotics and microchip companies, not regarding such acquisitiong as any sort of national concession nor related in any way to potential future means by which China could exert its power (since China's economic power and industrial policy is so closely intermingled with its state power). To its credit, at least the US is now engaging China on terms that are mutually comprehensible; Europe on the other hand (according to Maçães):

...the European political order evolved in a protected ecosystem. It is now so advanced and complex that it has lost any claim to universality and European citizens can hope for nothing more than to preserve it from external disturbances. Rather than aspiring to change the world and make it safe for European values, they now want to be left alone. Brussels' grand strategy starts to resemble that of the Qing dynasty in China

Compared to free trade, what would be the alternative method of using economic connections to strengthen ties between nations, accelerate growth, and keep the peace? Neoconservative militancy? An EU that ejects members like Hungary, and perhaps soon Poland, when they fail to meet requirements for human rights and democracy? A return to the rival trading blocs of the Cold War (recall how trade with the world’s prosperous democracies was the carrot that lured several nations out of the communist grip, and pulled several others into right wing dictatorships.). World war 3 didn’t fail to happen on its own, so I think anyone serious about an alternative approach would need to explain how their system preserves the peace.

[J Boogie]

Yet, if DT was committed to the freedoms, checks and balances, and limitations on leaders that characterize the American form of government, he might not demonstrate such authoritarian tendencies himself (although perhaps he might be committed to US dominance because it’s the team he is on.).

Yes, exactly. He's committed to US dominance because he's an American. Many Americans probably have a very superficial love of the constitution and the intent of the founding fathers but if they were emperor they would gladly jail their ideological opponents, etc.

Trump does have authoritarian desires it seems; but since he is the passing president of a United States whose laws are created by congress and executed by a president whose powers are limited and whose terms can last no longer than 8 years, I support this effort to limit China's rise to dominance.

[lost_in_the_endless_aisle]

Who knows what Trump believes--John Bolton is likely the one pulling the levers here and he believes China poses a serious geopolitical threat to the long-term interests of the US and its allies. In between segments of Fox and Freinds--during various commercials peddling catheters--I'm sure he shouted some very meaningful words into Trump's ear and got his approval on pursuing this anti-China scheme. Some (like Gordon Chang and Peter Zeihan) have argued China is much weaker than it appears, especially given its opaque internal finances and goal of maintaining rapid economic growth via credit expansion in spite of the questionable returns on those underlying investments. Of course, bold projections of impending Chinese collapse could be easily overstated in an effort to sell books--however, there may some financial strain already forming. Speaking of Bolton, he seems to be trying to leverage the UK's awkward position with respect to Brexit with the enticement of a trade deal to enhance the US's hard-line on China & Iran.

You seem to be picking up many of the same frequencies as I do, but we have differing views on this.

I think Trump has demonstrated he doesn't really care what his advisers have to say if he has a gut feeling on something.

Actually I pretty much agree with your assessment. When I say that Bolton is behind the current plan, I mean it's his strategy; clearly, Trump also strongly agrees that China is a worthy target of such a strategy. Trump's intuition is one of zero-sum thinking, which leads to his winner/loser dichotomy, which leads to his assessment that maybe the US is the loser (as noted elsewhere in this thread) between the two countries. Through a Darwinian selection process, the advisers he now trusts the most to forge his emotions into policy are those who agree in general with his view China is a threat.

You need what, like, $3 Trillion in tariffs a year to replace income tax?

I foresee problems with that.

A 100% tariff on everything would do it.

Who wants to pay twice as much for everything? That would create a lot of paupers overnight with no real benefit for the average Joe.

I think that he will not sign any deal with China before the election. Then he won't be running against Dems for re-election. He'll be running against China. From his point of view, not the worst strategy to employ--to the extent that he's capable of employing any strategy at all.

I also doubt China will sign anything with Trump before the next election in hopes of getting someone else in office they can work with.

The tell-tale sign that permanent tariffs are the plan will be if the 2021 budget is written in a way that assumes tariffs will contribute a significant percentage of revenue. DT would love to put the Dems in a position where they have to either agree with him or advocate for both lowering tariffs on China and undoing a recent tax cut to pay for it. Even in the agony of a recession that will be a tough position to take, and free trade has never been a core principle for Democrats anyway. The election could actually lock in the tariff policy.

That’s the short term impact. Long-term, as in over a decade, will the US be poorer? Will the free trading countries in the world outperform the tariff-based countries, as predicted by economic theory?

I used to believe the more orthodox free-trade narrative of economics but now I believe that there is a strong path-dependency to determine what comparative advantages a country has in the first place. In the short term, yes, free trade is better for everyone, but in the long run, it's not so clear that is optimal and what decision criteria can adequately determine when a country should invoke trade barriers.

Then there is the more directly geopolitical considerations at play with respect to national industrial policy: Bruno Maçães makes an interesting point in contrasting Europe's approach to the "Eurasian" one in Dawn of Eurasia where German officials are rather sanguine about Chinese interest in buying German robotics and microchip companies, not regarding such acquisitiong as any sort of national concession nor related in any way to potential future means by which China could exert its power (since China's economic power and industrial policy is so closely intermingled with its state power). To its credit, at least the US is now engaging China on terms that are mutually comprehensible; Europe on the other hand (according to Maçães):

...the European political order evolved in a protected ecosystem. It is now so advanced and complex that it has lost any claim to universality and European citizens can hope for nothing more than to preserve it from external disturbances. Rather than aspiring to change the world and make it safe for European values, they now want to be left alone. Brussels' grand strategy starts to resemble that of the Qing dynasty in China

Compared to free trade, what would be the alternative method of using economic connections to strengthen ties between nations, accelerate growth, and keep the peace? Neoconservative militancy? An EU that ejects members like Hungary, and perhaps soon Poland, when they fail to meet requirements for human rights and democracy? A return to the rival trading blocs of the Cold War (recall how trade with the world’s prosperous democracies was the carrot that lured several nations out of the communist grip, and pulled several others into right wing dictatorships.). World war 3 didn’t fail to happen on its own, so I think anyone serious about an alternative approach would need to explain how their system preserves the peace.

I'm not confident that the current environment is conducive to preserving the relative peace of the post-WW2 era. Perhaps a new global understanding and organizing principle can emerge in a multi-polar world experiencing a resurgence in nationalism, though it's not clear to me what that would look like. It's probable our current global institutions (many of which were designed under the umbrella of US hegemony) will not be sufficient to preserve order in the coming era. Naturally, trade has and will continue to play a role in enforcing some degree of cooperation, but what is more likely is in many cases it will merely restrain overt conventional confrontations in some theaters.

I mentioned Peter Zeihan before and although some of his predictions are sensationalist, I think he is generally on to something with his basic thesis (e.g. as elucidated in his book The Accidental Superpower): the US set up a system in the aftermath of WW2 by which it protects its allies' borders and trading lanes in exchange for their strategic solidarity in opposition to the USSR. Once the USSR collapsed, the organizing principal of the arrangement vanished, though the system of alliances carried with them a tremendous amount of inertia that allowed them to largely persist to the present day. Zeihan expects that as the US slowly comes to the realization that 1) it doesn't need those alliances quite so much to counter a diminished Russia; 2) as a % of GDP, the US is one of the least trade-dependent advanced economies in the world; 3) the US is becoming energy-independent, eliminating the particularly critical strategic importance of securing foreign oil supplies; and 4) the high price of maintaining global hegemony grows increasingly unpopular domestically, the US will lose interest in being the primary force driving the global geopolitical order. The retreat of the US from global affairs will give rise to a multi-polar world order characterized by growing destabilization, where regional rivals will increasingly fight through both conventional and unconventional means. The good news (for some of us) is Zeihan argues that the US will mostly be insulated from the growing chaos of the rest of the world, with a secure food supply, energy supply, and extremely favorable geography.

[use2betrix]

Without going in to too much detail, I believe he is going to wait until right before the election to make a deal.

Granted, this is with the assumption that China is willing to make a deal. I feel that they could also play that card, knowing that Trumps re-election could play very heavily whether a deal is made, and use it to their advantage.

If Trump can make a deal (even if it’s not that great) I feel it will send the market soaring, right before the election. That will give him a huge nudge ahead.

If China refuses to deal and calls his bluff, I feel the market could continue to plummet around that time and make it incredibly hard to re-elect.

[soccerluvof4]

Without going in to too much detail, I believe he is going to wait until right before the election to make a deal.

Granted, this is with the assumption that China is willing to make a deal. I feel that they could also play that card, knowing that Trumps re-election could play very heavily whether a deal is made, and use it to their advantage.

If Trump can make a deal (even if it’s not that great) I feel it will send the market soaring, right before the election. That will give him a huge nudge ahead.

If China refuses to deal and calls his bluff, I feel the market could continue to plummet around that time and make it incredibly hard to re-elect.

I am in total agreement with you along these lines. You see the market swings based the "China" news of the day for the most part. I am not sure even if the Market stays where it is he could win for a second term but I feel he has a shot of winning re-election would be a run up right before election.

[ChpBstrd]

This may be “the plan” but I have my doubts about whether DT’s tweets can postpone a recession or prevent the everything bubble from bursting. Even if the Federal Reserve targets lower interest rates, they’re not going to make up for higher prices, busted supply chains, uncertainty reducing business investment, or investors’ realization that many companies’ stock prices are based on the presumption of their expansion into China.

Also, China may have concluded Trump is not someone they’d like to work with (I.e. the sort of person who unilaterally imposes tariffs before negotiations even begin as a ploy to gain leverage). If the election is truly in their hands, they might just cut off negotiations around the election season and let the US stock market do what it will. How do you say “revenge is a bitch” in Mandarin?

[bacchi]

Leaving the Democrat to sign a deal early in the administration, a la Reagan and Iran....

[rocketpj]

I think anyone assuming a grand strategy on the part of Trump is projecting something they'd like to see.  I can't stand the man, but I would be somewhat relieved if I could believe that he was at least trying to enact a strategy of some kind that implies an awareness outside a 24 hour window.

A man who goes to great lengths to lie about misspeaking Tim Cook's name in a minor fumble is not a great strategic thinker.  He may have some around him who are trying to think long-term, certainly some that are using his position to advance their own goals, but he is barely able to think about the afternoon when it's still morning.  Let's not project competence where we wish it existed.

[jim555]

All China has to do is wait Trump out and not agree to any deal.  This would harm the world economy and lessen Trump's re-election chances.

[bacchi]

All China has to do is wait Trump out and not agree to any deal.  This harm the world economy and lessen Trump's re-election chances.

Yeah, Trump's negotiating strategy seems to be the "bully" or "strong arm" method. That works great if you're facing a party who is in a position of weakness, like sub-contractors. It doesn't work when you're facing someone of equal negotiating strength. In fact, it tends to piss the other party off.

China actually has the upper hand now because of the timeline. Trump is well aware of that.

[ChpBstrd]

All China has to do is wait Trump out and not agree to any deal.  This harm the world economy and lessen Trump's re-election chances.

Yeah, Trump's negotiating strategy seems to be the "bully" or "strong arm" method. That works great if you're facing a party who is in a position of weakness, like sub-contractors. It doesn't work when you're facing someone of equal negotiating strength. In fact, it tends to piss the other party off.

China actually has the upper hand now because of the timeline. Trump is well aware of that.

I agree the Chinese can play the long game. One reason why they can do this is because Trump will own the blame (in China as in the US) for any recession the Chinese must endure. The trade war was his idea. The downsides to taking an economic hit instead of a bad deal are a lot smaller for the Chinese ruling party than they are for the US ruling party. Our master negotiator president should (but might not) know he is in a weak position. The question is, will he settle for whatever consolation prize he can get at the time he needs negotiations to be done, or is his true objective to change the US tax structure. If the former, expect a trade deal within the next several months and possible avoidance of a recession. If the later, expect him not to offer the Chinese a deal they can accept and a recession. Hence the urgency of figuring out his motives.

I do not subscribe to the theory that DT's public persona reflects his intelligence or mental organization. This is akin to some people's idea that they "know" their favorite movie stars based solely on their acting and tabloid reports. If there was a marketplace where acting stupid could get you elected president, someone was bound to be smart enough to exploit it.

[marty998]

All China has to do is wait Trump out and not agree to any deal.  This harm the world economy and lessen Trump's re-election chances.

Yeah, Trump's negotiating strategy seems to be the "bully" or "strong arm" method. That works great if you're facing a party who is in a position of weakness, like sub-contractors. It doesn't work when you're facing someone of equal negotiating strength. In fact, it tends to piss the other party off.

China actually has the upper hand now because of the timeline. Trump is well aware of that.

I agree the Chinese can play the long game. One reason why they can do this is because Trump will own the blame (in China as in the US) for any recession the Chinese must endure. The trade war was his idea. The downsides to taking an economic hit instead of a bad deal are a lot smaller for the Chinese ruling party than they are for the US ruling party. Our master negotiator president should (but might not) know he is in a weak position. The question is, will he settle for whatever consolation prize he can get at the time he needs negotiations to be done, or is his true objective to change the US tax structure. If the former, expect a trade deal within the next several months and possible avoidance of a recession. If the later, expect him not to offer the Chinese a deal they can accept and a recession. Hence the urgency of figuring out his motives.

I do not subscribe to the theory that DT's public persona reflects his intelligence or mental organization. This is akin to some people's idea that they "know" their favorite movie stars based solely on their acting and tabloid reports. If there was a marketplace where acting stupid could get you elected president, someone was bound to be smart enough to exploit it.

I think you might not have the full picture on China here.... part of the social compact (as I understand it) over there is that the populace gives up their freedom in exchange for the Communist Party continuing to lift tens of millions out of poverty each year. You might quibble over the veracity of the economic growth figures but the overall trend has undoubtedly been economically positive for the broader Chinese society.

I could very well be mistaken but the regime needs to continue that prosperity otherwise it will fall - I mean, what else do they offer the ordinary Chinese man/woman? Your average rural peasant rice farmer isn't going to be as gung-ho about having pride in the glory of the motherland if they can't afford to eat.

As authoritarian as they are, no regime can contain the potential anger of 1.3 billion people.

[GrayGhost]

Eh... to ascribe a long-term, brilliantly-crafted plan to POTUS is a mistake, in my opinion. There's the old addage, don't attribute to malice that which can be explained by stupidity... I think it applies very clearly here. There a lot of things he's done, decisions he's made, that simply don't make any sense.

There is a slight possibility that he really is a mastermind masquerading as a... less intelligent person, but that's conspiratorial and there isn't much evidence for it.

Here's an article that discusses the matter: https://www.nytimes.com/2019/08/03/opinion/sunday/trump-2020.html

[lost_in_the_endless_aisle]

Eh... to ascribe a long-term, brilliantly-crafted plan to POTUS is a mistake, in my opinion. There's the old addage, don't attribute to malice that which can be explained by stupidity... I think it applies very clearly here. There a lot of things he's done, decisions he's made, that simply don't make any sense.

There is a slight possibility that he really is a mastermind masquerading as a... less intelligent person, but that's conspiratorial and there isn't much evidence for it.

Here's an article that discusses the matter: https://www.nytimes.com/2019/08/03/opinion/sunday/trump-2020.html

The idea Trump is much smarter than he appears is laughable and Boris Johnson is probably what someone doing that would actually look like.