William Conroy, Executive Director, Tyler Search

https://www.tylersearch.com
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William Conroy

Despite small concessions on both sides, the war will continue. Trade is the USA’s most potent weapon to counter China’s continuing intellectual property theft and unfair trade practices.

Xi Jinping has no term limits. He is popular in China and can wait out Trump as he struggles with a Democrat-controlled Congress bent on impeaching him, holding up the ratification of the already signed USMCA agreement, and unseating him in the November 2020 election. Everyone knows, except Trump himself, that Trump expects China to acquiesce to his trade demands when Trump finally decides to make a deal to improve his reelection efforts. Jinping will stall until the election. I believe China will wait until after either the defeat or reelection of Trump to negotiate a final resolution. Trump may have written The Art of the Deal, but he’s dealing with the country that wrote and worships The Art of War…where one of the most important tenets indicates, “All warfare is based on deception.” Trump has lost the advantage.

If Trump is reelected, then China will cede much more to the US, and certainly Trump will squeeze them. Jinping is willing to risk that possibility. The damage to their economy will become very significant, and their bulging middle class won’t tolerate a long trade war post-election. The risk of product sourcing away from China and to competing countries has already begun, and China will need to take action to prevent this from becoming a tsunami. If Trump is defeated, then China will wait until the new residents of the White House move in, reboot the negotiations, and seek a deal in their favor with faux conciliatory overtures. Either way, a meaningful US–China Trade Agreement won’t occur until Q1 2021.