Elephants in the Room
In Japan and South Korea, Trump Boxed Himself In
The United States is not making progress in its trade war with China or in nuclear talks with North Korea.
At the G-20 summit in Osaka, Japan, last week, and again in his last-minute meeting with North Korean leader Kim Jong Un at the North Korea-South Korea border on Sunday, U.S. President Donald Trump boxed himself in. He put on a magnificent show for the press, resulting in agreements that did nothing more than return him to where he was a few months ago.
In Osaka, the most substantial takeaway was Trump’s summit with Chinese President Xi Jinping. With financial markets and U.S. farmers reeling from Trump’s 25 percent tariffs on $250 billion worth of Chinese goods and fresh threats to extend those tariffs to virtually all remaining Chinese imports, there was a huge sigh of relief when Xi and Trump agreed to resume trade talks. But Beijing did not make any visible concessions because it knew that Trump was not going to move in either direction on tariffs. Cutting tariffs would have hurt Trump with the blue-collar voters he needs in Midwestern swing states to win reelection in 2020, and raising tariffs would have invited crippling retaliation on already suffering farmers whom Trump also needs. So he was boxed in.
Trump on the other hand did make concessions. By promising to rescind the Commerce Department’s ban on trade with the Chinese telecommunications giant Huawei, the president undercut his own administration’s arguments that the ban was the result of national security concerns, not just a negotiating tactic. Here again, though, the president may find himself boxed in, since a bipartisan coalition of national security hawks in Congress is likely legislate the restrictions on Huawei.
Trump then traveled to the Korean Peninsula, where he declared a spectacular victory with North Korea. The major substantive result of the president’s tour of the Demilitarized Zone and meeting with Kim was an agreement to resume talks that had stalled after Trump walked out of his summit with Kim in Hanoi in February. Trump left that meeting after Kim said he interpreted the agreement the two leaders reached at their first summit in Singapore the year before to mean that the North would be allowed to keep substantial parts of its nuclear arsenal and missile programs and enjoy sanctions relief in exchange for opening the Yongbyon nuclear facilities to inspections. That was essentially the same deal Washington and Pyongyang reached in 1994—except that Yongbyon is now equipped with nuclear capabilities the North was never supposed to have and the sanctions rollback on the table is more extensive.
North Korea telegraphed loudly in state media last week that this was its final offer, so it is not clear what negotiators will now do—though the New York Times reported that the Trump administration may be talking about pursuing a variation of the North Korean offer, which would be a spectacular concession by Trump if true. (While all previous U.S.-North Korea agreements, though flawed, were explicitly predicated on Pyongyang verifiably abandoning all its nuclear weapons programs, the current North Korean proposal would cover only the facilities at the Yongbyon complex and leave the rest intact in accord with Pyongyang’s assertion that it is now a nuclear weapons state.)
If on the other hand the talks are just for the sake of talking, one can only conclude that the Trump is using his relationship with Kim to maintain a “freeze for freeze” (no testing of long-range missiles or nuclear weapons in exchange for a halt to annual U.S.-South Korea military exercises). Trump now claims the North Korean freeze on testing as his major accomplishment despite the fact that State Department spokespeople and then-U.S. Ambassador to the United Nations Nikki Haley rejected an initial freeze-for-freeze proposal as “insulting” when it first came up in September 2017. Trump cannot go back to maximum pressure on the North without being blamed in the region for precipitating a return to testing on North Korea’s part, and he will not be able to convince Congress to support a bid to lift sanctions without substantial North Korean denuclearization—so he is again boxed in.
It does not take an expert on Trump’s past to see that this same modus operandi was his art of the deal in the casino business—leaping into disastrously overleveraged investments but ensuring that the media was distracted from the bad numbers by all the sizzle and excitement of the chase. In the end, Trump had few serious business partners who trusted him anymore. This could soon include U.S. allies in Asia.
I was in Tokyo and Taipei during the G-20 summit and encountered unprecedented levels of anxiety among senior officials there over the president’s judgment. On the eve of his visit to Osaka, Trump’s gratuitous attack on the post-World War II security treaty between the United States and Japan was bizarre and his attitude toward North Korea disconcerting. (Trump complained on Fox Business Network that Japanese would just “watch [the war] on a Sony television” while Americans fought to defend their country.) Businesses in Japan, South Korea, and Taiwan are all now moving supply chains out of China because they assume Trump’s tariffs will remain in place. That is a kind of victory for U.S. Trade Representative Robert Lighthizer, but business leaders in the region also anticipate a parallel set of supply chains remaining and growing for the Chinese market. This means that while there will be some decoupling of the U.S. and Chinese economies, there may also be a free-fire zone for Chinese predatory economics beyond U.S. reach. By gutting the World Trade Organization and abandoning the Trans-Pacific Partnership, Trump is limiting American influence in ways that worry the country’s closest friends in the region.
So far, the United States’ friends and allies are sticking with it, both because China’s aggressive stance gives them no choice and because they have confidence in many of the senior officials in the White House National Security Council, the State Department, and the Defense Department who help manage the president. But Trump’s actions have put the country’s closest friendships to the test.