I have been trying not to write about anything Trumpian. I feel like he has already received more attention than he deserves, and yet everyone keeps piling it on.
But a Nobel Peace Prize? Seriously?
The little rocket man, Kim Jong-Un, and the rich kid from Queens, aka the “dotard”, are not the best of buds. They should be, I suppose. They both built their power on the basis of what they got from their daddys. They are both nuttier than fruitcakes. They are both narcissistic and not very bright. In some senses, it could be a friendship made in heaven.
Somehow, though, I doubt their upcoming meeting in Singapore on June 12th is going to be just two soulmates, kicking back and sharing fake news stories.
For Kim, his agenda is to trade his failed (destroyed, apparently) nuclear program for something of actual value, in this case access to goods and markets of countries other than China, particularly South Korea. He also wants to show everyone that he is important enough to meet with the President of the United States. In fact, to make POTUS come to him, rather than the other way around. How good is that?
For Trump, he thinks his agenda is world-wide respect, and thus success at the mid-term elections and in his own re-election bid a couple of years from now. As per usual, he doesn’t actually care whether he delivers peace on the Korean peninsula. He just wants any result that makes him look better than Obama, and Bush, and Clinton, and the other Bush, and everyone else that couldn’t achieve Korean peace. Even everyone’s hero, Ronald Reagan, couldn’t deliver that.
To GOP governors and congressmen, fearful of decimation in the mid-terms, getting the little rocket man to agree to meet at all is reason enough for Trump to get the Nobel Peace Prize. He has, in their minds, taken a key step in the direction of peace, one step further than anyone else.
Clearly, he has finally shown his inherent brilliance, that light he has so successfully hidden under a bushel for far too long.
On the other hand, we may have slid inadvertently into an alternate universe, and any moment there will be unicorns dancing on the head of a pin singing Kumbaya.
So perhaps it is worthwhile to step back from the breathless abyss, and think about the motives of the only person in this drama that really matters.
Xi Jinping, the President of China.
Forbes recently named Xi the most powerful person in the world, and there is not much doubt they are correct. As President of China, and General Secretary of the Communist Party (and too many other titles to name), he is effectively the controlling leader in China. Nothing happens without his approval.
Now, what Xi wants is to build the Chinese economy and power on the strength of its dominance in the Asian and African economies. He knows that the ten ASEAN countries, as well as Japan, are afraid of Chinese economic hegemony, but if he is going to continue the growth of the Chinese economy he needs markets and allies (or client states, more precisely).
The only country really standing in his way is America. Europe cannot get their act together to challenge China, and Russia, for all its bluster, doesn’t really hold a candle to China when it comes to economic power. India, the only other potential pretender, is thirty years behind China. Their day may come, but right now they are markets, not competitors.
The biggest threat to China would have been the Trans-Pacific Partnership, or TPP, which as originally conceived would have been a trading bloc, led by the U.S., and including some Asian countries (notably Japan, Malaysia and Vietnam), as well as Canada, Australia, New Zealand and some South American countries. Thanks to Xi’s buddy Vlad over in Moscow, there is a new sheriff in the White House, and in January 2017 he withdrew the U.S. from the TPP. While the remaining signatories are trying to move forward, a TPP without the U.S. is much less of a threat.
Xi is now in a position where he can push his trade links with other Asian countries, with scant resistance. While Japan is still in TPP, Korea is not, nor are the Philippines, Thailand or Indonesia.
If you exclude Japan, Korea is the big prize there. It is far and away the most developed economy in Asia, outside of Japan. It has advanced technology, and strong links to the U.S., but is also China’s biggest trading partner. Between the north and south, there are more than 75 million people, and particularly in the north there is both an available workforce, and huge demand for Chinese products.
It is not accidental that Kim’s willingness to meet with Trump (and with Moon Jae-In, the President of South Korea) sprang seemingly out of nowhere after Kim met with Xi. North Korea has only two land borders: with South Korea, and with China (except for a tiny bit with Russia). The South Korean is currently closed to most trade. The Chinese connection is the main source of any goods North Korea has right now. China represents 83% of North Korea’s international trade.
What China wants, North Korea must do.
All of this talk about U.S. sanctions against North Korea entirely misses the point. North Korea is not going to be trading with the U.S., sanctions or no sanctions. North Korea has no money, and they don’t produce anything that the U.S. wants to buy. The same is true of most other countries. Trade with China, on the other hand, is critical to North Korea’s very survival.
Meanwhile, back in Washington, Trump is picking fights with Xi, imposing high tariffs directed at Chinese goods, and increasingly accusing China of being the enemy of U.S. prosperity. Fueled by his MAGA rhetoric, Trump’s xenophobic approach to trade has his supporters happy.
For Xi, this is not a bad thing.
Tariffs on Chinese aluminum and steel? China’s recent sales of aluminum to the U.S. amounted to a rounding error (0.019%) in China’s $2 trillion of exports in 2016. China’s steel exports have been dropping overall, because they need more steel domestically as their economy grows. Trump’s actions are not hurting China.
But Trump’s actions will hurt the U.S., as Xi well knows. Making inexpensive imported aluminum and steel more expensive will increase overall steel and aluminum prices in the U.S., increasing the cost of American manufactured goods. This will allow China to move some of its production to higher value-added products, in which it will now have a greater price advantage over U.S. products.
Further, higher domestic prices for goods in the U.S. will slow the American economy, and weaken the U.S. further. If Xi can goad Trump into further protective trade actions (cancelling NAFTA, for example, or continuing his war on the WTO), the costs to Americans, and the benefits for its trade competitors, will increase.
In short, right now Xi is winning when it comes to dealing with the U.S., and Trump is a big reason for that.
All of which says that Xi likes having Trump around. Xi knows that he can manipulate Trump, who is not as smart – and certainly not as strategic – as Xi. Having a puppet president to do his bidding is great for Xi.
What Xi doesn’t want is two things.
First, he doesn’t want a shift in the balance of power in Congress at the mid-term elections. That might result in Trump being prevented from doing the bone-headed things that Xi wants him to do.
Second, he doesn’t want Trump to be a one-term President. If he has Trump to deal with for another six years or more, he is confident he can, through Trump, do enough damage to the U.S. economy that Chinese dominance – at least in Asia and Africa – will be sustainable. If Trump is not strong enough to withstand a re-election challenge in 2020, then from Xi’s perspective there is a good chance he will be dealing with a much smarter White House come January 20, 2021.
All of which brings us to Singapore in June.
What Xi wants is to prop up Trump, and the little rocket man is his instrument to do that. If Xi can orchestrate some kind of deal between Kim and Trump, in which Kim gives up as little as possible (a nuclear program that has already collapsed), while Trump gives up something meaningful (some of South Korea’s military protection, and all of the North Korean sanctions), but Trump comes out of it looking presidential (wouldn’t that be something), then Xi strengthens Trump.
In the best of all possible worlds, what is looking like a shift in power at the mid-terms ends up being a razor-thin GOP Congress (both House and Senate). Trump will not be able to anything completely crazy (no all-out wars allowed), but he will be given leeway to make whatever mistakes Xi wants him to make.
It would also enhance Trump’s re-election prospects. Americans like to re-elect their presidents, unless they are really bad. A Trump diplomatic victory in Korea may be just enough to make him electable again.
Of course, that is the primary plan: save Trump, but at low cost. There is also a backup plan. If it is not possible to get Kim and Trump to make a deal, then at the very least increasing the destabilization of American politics continues to be a worthwhile goal. The lack of a deal may have the beneficial effect of hardening the pro- and anti-Trump positions of Americans. And, if there is further disarray in the U.S., Asian and African countries that would otherwise look to the U.S. as a strong ally may be more amenable to Chinese overtures.
Oh, and one other thing. What about Korea? Is it still possible to achieve détente between North and South Korea, even without a deal?
The answer is yes. China is the biggest purchaser of South Korean goods in the world ($158 billion in 2016, more than twice as much as South Korea sells to the U.S.), and South Korea is the fourth biggest purchaser of Chinese goods in the world ($94 billion in 2016). If Trump fails to make a deal, Xi has ample leverage on both North and South Korea to make a deal happen.
That step has always been available to China, of course, but there was never a compelling reason for China to make it happen. A Trump failure in Singapore could be such a reason.
Maybe Trump should get the Nobel Peace Prize after all. If after 65 years there is finally peace in Korea, and the main reason for it is that Trump is Xi’s perfect puppet, then he is still playing a key role, just as Charlie McCarthy did for Edgar Bergen years ago.
Shouldn’t that count for something?
– Jay Shepherd, May 20, 2018