Trump needs more than a 'phase one' US-China trade deal to boost 2020 odds, GOPers say

Key Points
  • President Trump has hailed the partial trade agreement with China as the "greatest and biggest deal ever made for our Great Patriot Farmers."
  • But Trump needs a better one if he hopes to use it to boost his re-election odds, strategists and experts say.
  • "As the old saying goes, you can't eat hope. Only a real resolution of the trade war, not a sweet sounding press release, will matter," says elections analyst Larry Sabato.
President Donald Trump, right, shakes hands with Liu He, China's vice premier, during a meeting in the Oval Office of the White House in Washington, D.C., on Friday, Oct. 11, 2019.
Andrew Harrer | Bloomberg | Getty Images

President Donald Trump has hailed the partial trade agreement with China as the "greatest and biggest deal ever made for our Great Patriot Farmers."

The unwritten agreement, announced on Friday after high-level talks between the two superpowers, has so far been described only in vague terms, and is expected to come in phases. And Trump will need a better one if he hopes to use it to boost his reelection odds, according to Republican and Democratic strategists.

"Trump won the big three (MI PA WI) by a grand total of 77,000 votes. It doesn't take much of a shift to reverse that," Larry Sabato, a leading elections analyst and director of the Center for Politics at the University of Virginia, said in an email, referring to Michigan, Pennsylvania and Wisconsin.

"As the old saying goes, you can't eat hope. Only a real resolution of the trade war, not a sweet sounding press release, will matter," Sabato said.

The trade war between the U.S. and China has been particularly damaging to states dominated by farm and manufacturing economies, where the president's 2016 margin was in some places thin. State polls show that his standing in those states, which include Michigan, Pennsylvania and Wisconsin, has soured since he took office. Trump, however, remains the favorite for 2020 in betting markets.

According to the White House, phase one will be written over the next few weeks and will include Chinese purchases of up to $50 billion in American agricultural goods. So far, though, Wall Street analysts and Chinese state media have been skeptical about the prospects that the deal will move the countries closer to an effective truce in their damaging trade war, which has rattled markets and threatened global growth.

Republican strategists and experts also agree that more is needed. Until the trade agreement wins over Wall Street and the broader business community, it's unlikely to matter to everyday voters who generally vote based on economic conditions, they said.

"This trade deal is being sold as something that will help America and the economy. It needs to do all those things," said Matt Gorman, a former communications director for the National Republican Congressional Committee. "It's more about the outcome than the process."

Carlos Curbelo, a Republican former congressman from Florida, said he expected few voters will look at the details of the deal itself. But, he said, they will be paying attention to what happens to unemployment numbers and the balances of their 401(k) retirement accounts. On that front, he said, he was skeptical.

"I don't think this partial agreement is enough, because it does not provide the economy and the markets the long-term certainty that they seek," Curbelo said. "There was some early optimism and enthusiasm, but I think as more details emerge, we are seeing that early energy start to wane."

Markets initially soared on news of the trade deal before losing much of their gains in short order after Treasury Secretary Steven Mnuchin told CNBC on Monday that tariffs slated for December will still go into effect without another agreement. Friday's deal also left in place tariffs from September on a broad range of Chinese-made consumer items.

A matter of trust

Democrats say that they hope to connect the president's inability to lock down a comprehensive trade deal with China to so-called kitchen-table economic issues.

Kelly Dietrich, CEO of the National Democratic Training Committee, which trains Democrats running for office in all 50 states, said the issue also plays into questions about the president's trustworthiness.

"You can't trust anything the president says. So until we actually see what is in the deal, instead of what the president says, no one is going to be counting the chickens before they hatch," Dietrich said. "They've got to see it in their own pocket books."

Already, some cracks are showing in the deal. China is hoping for another round of talks before signing the agreement, a source told CNBC's Kayla Tausche on Monday. Bloomberg News earlier reported that Beijing wants the Trump administration to do away with December's scheduled tariff hike.

In a statement, Kayleigh McEnany, national press secretary for Trump's reelection campaign, said Trump's trade deal is a "huge victory for every American and comes after decades of past presidents allowing China to take advantage of our country."

"President Trump is winning for America's workers, and voters across the country are taking notice," she said.

Despite the lack of detail about the trade agreement, it is still possible the president could benefit from being seen as tough on China.

Curbelo, who served two terms representing Florida, said his state, a key 2020 battleground, is likely to be more receptive to the president's extended trade discussions with the communist nation.

"Particularly in Florida, where there are so many Hispanic voters that hold anti-communist views, it could actually pay off," Curbelo said. "Of course, as long as the economic impact is limited. If this dispute gets more complicated and markets react negatively, then all bets are off."

Gorman, the Republican strategist, agreed.

"Being aggressive and taking on China does not lose you votes," he said.

VIDEO5:3605:36
We might be in a 'mini recession,' says Evercore's Roger Altman