China Scholars Unsure if Trade War Will Continue in 2019
After the March 1 deadline, President Donald Trump could declare victory in the trade war, or his administration could decide the Chinese have not offered substantial changes in response to America's complaints about industrial policies and discrimination against U.S. firms. "It probably depends on what he's seen on Fox News this morning," Center for Strategic and International Studies' William Reinsch said at a CSIS program on Asia in 2019 on Jan. 23. Still, he said, Trump has a pattern of "lots of bluster, lots of threats, occasional use of a threat, and then at the end of the day, he tends to settle for much less than he asked for."
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Fellow CSIS scholar and panelist Scott Kennedy is a bit more pessimistic, thinking the impasse will continue but not predicting a ratcheting up of tariffs. "Both sides to me look like they're digging in their heels," he said. Matthew Goodman, a CSIS scholar who studies Asian economics, said he thinks Trump's concern about the stock market will rein in his pro-tariff tendencies. "At the end of the day, I think Trump's going to take the deal and declare it the greatest deal since NAFTA" was rewritten, he predicted.
The scholars also talked about other trade developments that could happen in Asia in the coming year. Reinsch, who specializes in international business at the think tank, said he does not think the U.S.-Japan trade talks will conclude this year. Not only does Japan tend to negotiate slowly, he said, "there may be bandwidth issues on the U.S. side." He said U.S. negotiators will be distracted by "getting [the new NAFTA, known as] USMCA through the Congress, which I think is possible, but it's going to be time-consuming," especially for political appointees at the Office of the U.S. Trade Representative.
The panelists also asked the audience for votes on what they think will happen on trade in the medium term. They asked if Trump's trade policies will last beyond his presidency. Panelist Stephanie Segal, who also specializes in economics at CSIS, said she doesn't think that a future administration will use Section 232 to raise tariffs on trading partners.