Trump’s Heat level: Trade deal with China pushes Trump into the chilly territory

  • + The US-China trade deal puts Trump into a ‘chilly’ territory this week. 
  • + His history as a salesman influences his foreign policy approach. 
  • + Attaining the (perceived) upper hand in the deal is always Trump’s priority.

Touted by many as one of the greatest and most manipulative salesmen in history, Donald Trump has been steadfast in keeping up this persona even in his capacity as President. Backed up by endless examples of ruthless selling stories, devious navigation around the law and the mastermind behind The Art of the Deal, Trump’s dedication to the sale is one thing that can never be questioned.

To this end, selling is in the Don’s blood, as passed on by his notoriously fiery and ambitious father Fred Trump, who from a young age instructed him to become “a killer and a king.” With this virtual indoctrination in mind, one can appreciate how Trump being raised in a ‘sell and succeed at all costs’ environment has fundamentally impacted his approach to business and the Presidency.

Three Common Themes

Crucially, the act of selling for Trump is never about the good or service itself. He is, after all, not an inventor or some sort of creative entrepreneur with a sense for innovation. Rather, the key to Trump’s hottest strategies and policies is taking what’s in front of him, learning the basics of the product sufficient to string a few onomatopoeic sentences together about it, and selling it for all its worth and more. In turn, its three factors within the process of selling that Trump truly gets a kick out of.

First, Trump enjoys the element of deception within the selling process, thriving off the notion that he can be bending the rules and selling a rubbish offering for well-above value (often at the same time). Second, comes the marginalisation, in which Trump as a means of positioning himself above his rivals in the eyes of the public, will resort to any means necessary to put his adversary down; he is certainly not afraid to get personal and his hands dirty. And then finally, as we have previously covered, there is the winning of the deal and all the hype that comes with its announcement and publicity. For this, simply, Trump is obsessed.

So, What’s the Deal?

One can very much apply this to the recently announced first phase of the Trade Deal, signed between Trump and China’s President Xi. In short, China has committed to buying an additional USD$200B in US imports over the next 2 years, from which a great proportion will be derived from agricultural products such as pork, soybeans, wheat and cotton. Beyond this commitment toward additional US imports, China has also agreed to a series of largely undefined arrangements, such as:

1. Greater stringency and protection for US companies from Intellectual Property (IP) theft
2. Ease of regulation for US banks wishing to work in China
3. The implementation of stronger local anti-counterfeiting and fraud mechanisms

Crucially, however, these alleged promises will not necessitate a shift or change in local Chinese laws, which has left some wondering whether the disparities between US and Chinese interpretations will lead to an overall unsatisfying outcome. In any case, in response to the above commitments, Trump has promised to alleviate economic pressure on China to the tune of USD$120B, by reducing tariff rates from 15% to 7.5% on Chinese goods.

Sell Hard, Sell Fast

Now, if after having read all of this and feeling like this outcome is more Not than Hot, don’t worry. You are not the only one. It just seems perplexing that after these past months of substantial mutual detriment and damage, as derived from the US-China Trade War, that this is the deal. Is it a step in the right direction? Unquestionably. Does Trump have a claim to the upper hand at this stage? Probably yes, as well. But for the economic and social strain he has put his own people through over the past months, if nothing else, one must question why it took so long and whether this whole Trade War was really worth it?

Alas, at best it is a mediocre deal and at worst, could be the work of a 1st-year economics student after a half-hour of brainstorming. But that, of course, is not the point and never will be with Trump. It’s the fact that the deal is through and that now, he can spin it in any fashion he so desires, of which he has wasted absolutely no time doing. As such, Trump is already on the front foot, using his ‘landmark agreement’ as campaign bait, touting it as the “biggest deal ever seen.”

Anyone Buying Trump Futures?

So now Trump is off on his merry way, blitzing outlines of “Greatest deal” this, “A win for America” that, soaking up every inch of plaudit he receives. Another successful deal and feather in the cap of the unwavering salesman. However, as even Trump himself must surely know, the truly defining elements of the US-China Trade Deal will likely come about in its impending second instalment.

The success or failure of Trump to effectively position the US in the long-run with China at a political-economic level, spanning the likes of Chinese currency manipulation to the US’ approach to Huawei technology and 5G, will ultimately work to embody the agreement’s legacy. But until then, Trump will continue to oversell the success of the first instalment, hoping to build up sufficient positive public sentiment that even in the event of a mediocre second deal, he will continue to be seen by enough of the public as the master deal-crafter.

Daniel Bloch

R&A Alumno