Ivan Kraljevic, lives in Florida Answered
He is contradicting himself. But, anyway, what he is saying uncovers a lot.
First let’s lay out how he is contradicting himself:
Indeed, on Aug 9, 2019 he said: “we are not ready to make a deal, but we’ll see what happens ... China wants to do something, but I’m not doing anything yet. Twenty-five years of abuse. I’m not ready so fast”
Less than a month before that (Jul 26, 2019), though, he stated pretty much that it was China the one delaying a deal (“Trump said China may be delaying a deal in a bid to wait him out in the hope a Democrat wins in November 2020”). In his colorful and tendentious words: “I think that China will probably say ‘let’s wait,’” he said. “‘Let’s see if one of these people who gives the United States away, let’s see if one of them could get elected.’”
But a bit over a month earlier (Jun 12, 2019), it was the other way around, with President Trump insisting that “It is me right now that is holding up the deal. And we're going to either do a great deal with China or we're not going to do a deal.”
Not two months before, though (May 7, 2019), it was China the one dragging their collective feet: "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"
And if we keep looking further back, we will surely find more zigzagging.
Things like this are cause for his critics to see him as a liar and a fool.
But while he is certainly the former, the way to interpret President Trump is that although he will say whatever he wants to regardless of how false it is, he never utters a word (or writes a tweet, for that matter) but to achieve something. He is an absolutely utilitarian liar.
From that, one obvious probable reason for his zigzagging is that he is trying to position himself so that whatever happens he comes out as the one calling the shots: If there is a deal, it will be in spite of China trying to delay it; if there is no deal, it will be because he said no.
But, a lot more important, is the fact that both statements (he holding the deal, the Chinese holding the deal) have one thing in common: Both seek to preemptively justify the deal being delayed.
And it is in that light that we can start to make sense of what is going on: When the argument that the Chinese are holding the deal becomes plausible, he uses it to stir his base. But when that argument does not hold -when it becomes pretty evident that the Chinese are willing to make a deal- he uses the other argument, because he is really working to delay the deal and needs to explain why.
And why is that? Because every delay is an opportunity to apply more tariffs on more Chinese products.
If this seems too flimsy an indication of President Trump’s intent, we can actually reach the same conclusion from many other developments that have occurred since the Trade War started.
For example, when on May 6th, 2019 the negotiations -which had looked promising until then- broke down after President Trump accused the Chinese of “backtracking”, it became public, through the Chinese, that the big hurdle had been that the Trump Administration wanted to keep the tariffs even if a deal was reached. The Trump Administration did not dispute that account.
I.e., the tariffs are an end by themselves.
Why is that?
Because that was the plan from the beginning.
Indeed, the famous (infamous?) Tax Reform of 2017 had -very publicly- as a key element, a tariff-like tax, called the Border Adjustment Tax (BAT) that was designed to compensate for the tax cuts that were going to be given to the higher tax brackets (the wealthy) and the corporations.
But the Trump Administration and Congress had to scrape it -or rather postpone it- after it was opposed by major Republican donors, being as it was a tax on consumers that would hurt their bottomline.
But the Tax Reform cannot survive without some means of compensating for the lost revenue. The deficit is exploding.
So, if the BAT could not be sold to the American public when it became obvious it was an additional tax on the middle class and the poorer segments, some other mechanism needed to be devised.
And, especially, a new packaging for that mechanism was required, one that the patriotic American public could buy…
