Trump’s Latest Flip: US Backs Off Trade War With China

(ANTIMEDIA)  — It seems Donald Trump is willing to postpone the much-hyped trade war with China in exchange for the country’s continuing cooperation on North Korea. Trump signed an executive order Monday authorizing an investigation into Chinese trade practices that was far less severe than previously anticipated.

Back on August 6, China, along with the other members of the U.S. Security Council, unanimously agreed to new sanctions against North Korea. Shortly after, it was reported that the Trump administration would delay its probe into what it considers China’s unfair trade advantage over the United States. From Bloomberg on August 8:

“US President Donald Trump plans to wait at least a week and possibly longer on moving forward with a trade investigation of China on intellectual property violations after the country backed UN Security Council sanctions on North Korea, an administration official said.

“Trump and his advisers remain concerned over what the US perceives as Chinese violations of intellectual property and the plan for a trade investigation is still under consideration, the official said. But the White House wants to encourage and reward China’s cooperation on North Korea and is balancing national security concerns against domestic economic considerations, the official said.”

The question in the minds of Trump administration officials was whether or not China would follow through on the economic strikes against its ally and neighbor. Those fears appeared to be minimized Monday when China announced that per the U.N. agreement,  it will impose sanctions on North Korean imports on a variety of goods, including coal and iron ore.

Following that announcement, Trump again appeared to signal — via the signing of the weaker executive order — that cooperative behavior by China on the North Korea issue is an avenue toward a smoother trade relationship.

Until recently, Trump had been floating the notion of initiating a so-called “Section 301” investigation, named for a little-used provision of a 1974 act, into China’s trade practices. That investigation would have been led by Trump’s trade representative, Robert Lighthizer, and would have given the U.S. the power to impose tariffs and other duties.

But the executive memorandum Trump signed into law on Monday possessed far fewer fangs, authorizing Lighthizer only to determine if an investigation is warranted in the first place, which could take months.

In reporting on the U.S. president’s signing in a piece titled “Donald Trump soft pedals after earlier threats of trade war with China,” the Guardian highlighted the concerns analysts previously felt:

“Experts had predicted such a move could draw a ‘very aggressive’ response from Beijing and might even cause a full-blown trade war with potentially huge global ramifications.

“Instead, Trump has asked Lighthizer to consider whether this kind of move is necessary, a process officials say could take up to a year.

“Trump’s decision to land a far softer blow on China than expected means a trade war between the world’s top two economies now appears not to be imminent. “

Despite this walking back, Trump nevertheless insisted Monday the signing was “a very big move” and just the start of his campaign promises to slash the United States’ trade imbalance with China.

“This is just the beginning,” Trump stated“I want to tell you that. This is just the beginning.”

Regardless of Trump’s words, however, analysts still believe the president’s actions suggest that foreign policy on North Korea currently takes priority over the United States’ trade relationship with China. From the BBC, citing a report from the international consulting firm Eurasia Group:

“Rightly or wrongly, the White House believes that taking tough trade actions against China will harm its ability to elicit more co-operation from China on North Korea. This decision captures that prioritisation more than any other to date.”

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