Trump Makes No Promises On China Trade Deal | WYPR

Trump Makes No Promises On China Trade Deal

Nov 12, 2019
Originally published on November 12, 2019 8:09 pm

President Trump says the U.S. and China are close to striking a mini trade agreement. But he offered no guarantees.

In a speech to the Economic Club of New York on Tuesday, Trump downplayed the cost of his trade war, which has hurt farm exports and contributed to a slowdown in the U.S. manufacturing sector.

"The real cost would be if we did nothing," he said.

Trump offered few clues about the status of trade talks except to say, "We're close."

"A significant phase-one deal with China could happen — could happen soon," he said. "But we will only accept a deal if it's good for the United States and our workers and our great companies."

Stocks rallied last week after China's Commerce Ministry announced that the U.S. had agreed to roll back some tariffs as part of a mini trade deal. Trump welcomed the stock market gain but denied that any such agreement had been struck.

The president used his New York address to boast of an economic turnaround since he took office, although statistics paint a more nuanced picture.

While unemployment has fallen to a near half-century low, job growth has slowed on Trump's watch, with 6.3 million jobs added during the last 33 months, compared with 7.4 million jobs during the last 33 months under President Obama.

GDP growth accelerated after the passage of the GOP tax cut in 2017 but has since fallen, with an annual growth rate below 2% in the most recent quarter. And manufacturing activity has declined for the last three months.

Fallout from the trade war may have cost Republicans up to five House seats in the midterm elections. New research suggests that while GOP candidates lost support in parts of the country hurt by retaliatory tariffs, there was no offsetting pickup in areas where Trump's tariffs gave a boost to local industries.

"It was all pain and no gain," said Emily Blanchard, an economist at Dartmouth College's Tuck School of Business. "And we were sort of surprised by this."

Blanchard and her fellow researchers found that the hit to Republicans was strongest in the most competitive districts, where opposition to the trade war rivaled health care as a politically powerful issue.

"If you're in a close district, this is a little note to wake up and smell the coffee and maybe be worried about some of these pocketbook issues," Blanchard said.

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ARI SHAPIRO, HOST:

President Trump says the U.S. is close to reaching a mini trade deal with China. But he offered no guarantees when he spoke to a business audience today in New York. Investors are watching anxiously for any sign of a truce. The trade war already has taken a toll on U.S. farmers and factories. Now there's new evidence the tariffs and countertariffs (ph) have taken a toll on Republicans' political fortunes too. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: Anyone hoping for a clear signal about the direction of U.S.-China trade talks didn't get much this afternoon from President Trump.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: We're close. A significant phase one trade deal with China could happen - could happen soon. But we will only accept a deal if it's good for the United States and our workers and our great companies.

HORSLEY: It's been a month since the U.S. and China announced a handshake agreement, but nailing down the details has proven difficult. Trump, who fancies himself a master dealmaker, continues to insist he has the upper hand in negotiations and that China needs a deal more than he does.

(SOUNDBITE OF ARCHIVED RECORDING)

TRUMP: Their supply chains are cracking very badly, and they are dying to make a deal. We're the ones that are deciding whether or not we want to make a deal.

HORSLEY: Of course, it's Trump not Chinese President Xi Jinping who has to campaign for reelection next year. Trump's speech today was a sort of dress rehearsal for the economic piece of that campaign. In an effort to command the spotlight, Trump painted a dark picture of the economy he inherited almost three years ago.

(SOUNDBITE OF ARCHIVED RECORDING)

TRUMP: At that time, America was stuck in a failed recovery and saddled with a bleak economic future. And it was bleak.

HORSLEY: In fact, job growth in the last 33 months of the Obama administration was stronger than it's been in the first 33 months of the Trump administration. GDP growth did accelerate last year, but that sugar high has quickly worn off. And while the unemployment rate is close to a 50-year low, Trump's boast of exceeding economic expectations got only tepid applause from his New York audience.

(SOUNDBITE OF ARCHIVED RECORDING)

TRUMP: Thank you. I was waiting for that.

(LAUGHTER)

TRUMP: I almost didn't get it.

(LAUGHTER)

HORSLEY: Trump continues to blame the Federal Reserve for raising interest rates last year, even though the central bank has now cut rates at three consecutive meetings. Meanwhile, the president's own trade policies have cast a shadow over the economy. John Hess, who runs a big oil and chemical company, pressed Trump during his New York appearance about the price tag of those tariffs.

(SOUNDBITE OF ARCHIVED RECORDING)

JOHN HESS: There's a growing consensus that the trade war has a cost. A number of industrial sectors have recently been hurt.

HORSLEY: Manufacturing has been in a slump for the last three months. Farm exports have taken a beating. China shows little sign of giving ground on the practices that sparked the trade war, such as intellectual property theft. But Trump insists it's all been worth it.

(SOUNDBITE OF ARCHIVED RECORDING)

TRUMP: The real cost, John, would be if we did nothing.

HORSLEY: There's also a political cost. New research suggests the trade war cost Trump's fellow Republicans as many as five House seats in last year's midterm elections. Dartmouth economist Emily Blanchard and her colleagues found GOP candidates lost support in parts of the country hurt by retaliatory tariffs. What's more, they got no offsetting benefit in areas where Trump's tariffs might have given a boost to local industries.

EMILY BLANCHARD: It was all pain and no gain, and we were sort of surprised by this.

HORSLEY: Blanchard says the hit to Republicans was strongest in the most competitive districts, where opposition to the trade war rivaled health care as a politically powerful issue.

BLANCHARD: So if you're in a close district, this is a little note to wake up and smell the coffee and maybe be worried about some of these pocketbook issues.

HORSLEY: So far, though, that ominous political aroma does not appear to be affecting Trump's calculation about next year's contest. Trump said today if China does not cut a trade deal, he's ready to impose more tariffs.

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