Trump Softens on China with Goal of Containing North Korea
President ditches key campaign promise to label Beijing a currency manipulator
President Donald Trump made clear on Wednesday he won’t whack China with the label of “currency manipulator,” one of the biggest promises of his 2016 campaign.
The memorable promise was one of Trump’s main threats made on the campaign trail, and it had effect: Millions of blue-collar voters, many of them adversely affected by unfair Chinese trade and currency practices, flocked to vote for Trump over many Republicans, and, ultimately, Democrat Hillary Clinton.
“I was very impressed with President Xi, and I think he means well and I think he wants to help. We’ll see whether or not he does.”
The currency-manipulation flip-flop marked a stunning day in which Trump reversed or altered his stance on four campaign positions.
Trump also reversed himself, or seemed to, on keeping Janet Yellen on as Federal Reserve chairwoman; keeping the Export-Import Bank funded; and on NATO, which Trump once called “obsolete.”
Speaking at a Wednesday joint press conference with NATO Secretary-General Jens Stoltenberg, Trump said he no longer considers NATO obsolete, because the treaty organization has adjusted its anti-terrorism policies. Trump’s shift on NATO has been gradual and expected.
But it was remarks on currency manipulation that may be Trump’s biggest policy flip-flop to date.
Jeff Mason, the Reuters White House reporter, asked Trump if the Wednesday vote at the U.N. — China abstained on a vote to condemn the Syrian chemical-weapons attack — was a reason Trump would abandon his effort to label China a currency manipulator.
The label of currency manipulator would come with some cost to China, which keeps its currency low to make its exports cheaper. The label could enable the president to complain to the World Trade Organization, which could appoint a “dispute-settlement panel” to hear the complaint. According to the Congressional Research Service, China could not veto the establishment of a panel or adoption of a WTO decision by WTO members. It could mean higher duties for Chinese exports.
Trump’s position was not considered extreme. Republican Mitt Romney, the 2012 GOP presidential nominee, said he might slap China with the label. One of Trump’s earliest supporters in Congress — Rep. Chris Collins (R-N.Y.) — has long supported the label.
Trump avoided the Reuters question on Wednesday and instead suggested the situation with China has shifted because of North Korean concerns.
“President Xi wants to do the right thing,” said Trump. “We had a very good bonding. I think we had a very good chemistry together. I think he wants to help us with North Korea. We talked trade. We talked a lot of things. And I said, the way you’re going to make a good trade deal is to help us with North Korea. Otherwise we’re just going to go it alone. That will be all right, too. But going it alone means going it with lots of other nations. But I was very impressed with President Xi, and I think he means well and I think he wants to help. We’ll see whether or not he does.”
China has already taken some action against North Korea. Reuters reported that following repeated missile tests, China banned all imports of North Korean coal on Feb. 26, cutting off the country's most important exports.
It may also be possible U.S. officials have already been negotiating with China on currency manipulation. Some observers argue China has seriously reduced its manipulation.
But how Trump will communicate that to his base of millions of voters is unclear. Trump made his Wednesday pronouncement on currency manipulation to the Wall Street Journal, days after giving exclusive interviews to the New York Times, the Financial Times and the Washington Post — a sign the "disrupter" president is engaging willingly with old-guard establishment voices.
The flip-flopping has not gone unnoticed. Fox News' Martha McCallum noted on Wednesday that Trump criticized China on currency manipulation only 10 days before. The Hill ran a brutal headline: "Trump flips on four policies in one day." And the Washington Post's Wonkblog ran a rather startling Wednesday headline: "3 big ways Trump is starting to sound like Obama on the economy."