Unofficial Emissary – Michael Pillsbury Heads to China…
The dance with the dragon is a complex geopolitical relationship between two large economies. China’s view within the dynamic is shaped by their own internal ideology and outlook. The panda mask dynamic was/is strategic and has served them well for decades; but now President Trump -while engaging a structural confrontation- has used the panda strategy against Beiing’s interests. China is flummoxed.
Each of President Trump’s trade team members have a specific role; each member also has a specific opponent within the dance:
♦Peter Navarro is the blue-collar hawk. He focuses on the the administration’s Wall Street adversaries; and the U.S. multinationals -domestic corporations- who have aligned their interests with Beijing. Navarro’s focus is internal to U.S. interests. Navarro confronts U.S. corporations, Wall Street interests, who are working against Main Street.
♦Treasury Secretary Steven Mnuchin carries the economic financial weapons (represents the dollar), and he faces toward global adversaries (IMF, World Bank, European Central Bank etc.) who have also aligned their interests with Beijing and the status quo.
♦Commerce Secretary Wilbur Ross, coordinates the punitive actions that keep Beijing in a position of compromise. Ross reviews prior agreements, trade legal specifics, searches through contractual obligations and ultimately controls the tariffs, if/when triggered by President Trump. Secretary Ross faces down the World Trade Organization (WTO).
♦U.S. Trade Representative Robert Lighthizer is the contract writer; the primary negotiator; and he is at the center of the trade group where the details are constructed. Lighthizer writes the terms based on the objectives of President Trump. Only POTUS approves the new agreements.
♦White House Economic Council Chairman Larry Kudlow is the explainer, the trade diplomat. The communication bridge between what is happening in the big picture and what the subsequent consequences mean. Chairman Kudlow is to remain affable, optimistic and approachable by any interests who have concerns. The PR guy.
“It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system. For the initiator has the enmity of all who would profit by the preservation of the old institution and merely lukewarm defenders in those who gain by the new ones”
Navarro, Mnuchin, Ross and Lighthizer bear the economic teeth. After all, their job is serious… they have all the confrontational challenges… they face those who want to stop President Trump’s global trade reset. Their goal is to ‘change the status-quo‘ toward greater reciprocity for the U.S. and to stop the one-sided nature from decades of trade agreements which eroded the U.S. middle-class. Because their objective is change, they face the adversaries head-on. Their tasks make them targets. This group are hard men.
Kudlow is the soft-one. That’s his job. Be approachable by those who don’t like confrontation. Kudlow calms nerves and keeps the nellies‘ less nervous.
Within this dance, there is an important place where East/West negotiations require respect. The panda mask is part of the dynamic, perhaps the cunning and positioning part, but beyond the mask actual terms need respect from both parties.
Beijing violated that central component of respect in May, 2019, when they rebuked the terms of an agreement that were 80 percent negotiated and accepted by their own emissary. China is paying the price for that violation now. They likely did not anticipate the severity of punishment, now they are living with consequences.
President Trump has delivered punishment but continued to praise the opponent in hopes of encouraging Chairman Xi to rethink the dragon position.
There are many U.S. hawks celebrating the pain within China; and some of those same voices are calling for continued policy that will lead to the collapse of the central Chinese communist government. That ain’t going to happen.
If there are going to be terms, there needs to be a middle position. President Trump has always expressed hope that terms can be reached; however, he has also expressed pragmatically that successful terms likely involve too much loss for Beijing to accept.
President Trump has done all he can to encourage U.S. multinationals to think about the impossibility of structural change in Beijing against the severity of their own experiences. In essence President Trump has warned U.S. companies to plan for the worst, and get out.
The complaints from U.S. and allied interests about Chinese trade practices are not likely be fixed; the issue is structural. China will not change the structure of their totalitarian controlled economic model. They are communists.
However, that said, within this ongoing dance there needs to be panda dialogue – because the global downsides are severe…. Enter Michael Pillsbury:
via The Last Refuge https://ift.tt/31trRxc