Politics

Trump pulls punches and clings to his China trade deal as backlash against Beijing grows

Key Points
  • China's unpopularity and missteps present Trump with an opportunity to recast his reelection message to focus on the threat from China.
  • But lashing out at Beijing risks undermining Trump's China trade deal, a crown jewel of his first term.
  • Both strategies carry risks in the real world, where China has a lot of leverage over the United States. 
President Donald Trump, left, and Xi Jinping, China's president, shake hands during a news conference at the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017.
Qilai Shen | Bloomberg | Getty Images

WASHINGTON — With six months before the November election and America gripped by its worst disaster since 9/11, President Donald Trump's reelection effort is ready to bash Beijing.

But Trump himself has yet to embrace this plan, by all indications. For instance, his campaign team does not appear to have purchased airtime yet for a China-centric ad it created earlier this month.

Trump still appears convinced he can win reelection over apparent Democratic nominee Joe Biden by running on his leadership over the past three years, including during the coronavirus pandemic. Trump has made it clear he believes the economy will return to pre-coronavirus strength after the outbreak subsides, and he will be credited with its recovery.  

For this narrative to work, Trump needs China to be a symbol of his victory in the trade wars that he promised voters in 2016 that he would fight and win. 

Yet outside the world of campaign messaging, in the real world where the U.S. economy shows no signs of recovery and more than 40,000 Americans have died in the past three months, both strategies — China as a target and China as a trophy — carry risks for the country. 

"By tying his own political fortunes so tightly to this one deal, Trump has managed to box himself in on China" said Doug Heye, a veteran GOP strategist with marketing and communications firm Craft Media. "And the next time he needs to hold China accountable for what they've done, like right now, he won't be able to." 

Zeroing in on China wasn't the original plan for the campaign. In January, Trump planned to run for reelection on the strength of a booming economy and a pledge to keep fighting the "deep state" government bureaucracy. But that all ended as soon as the coronavirus pandemic gained a foothold in the United States.

Since then, Trump's reelection team has struggled to come up with a post-coronavirus message that resonates with voters. The task became more urgent in recent days, as polls showed Trump's public approval slipping again after a brief "rally-round-the-flag" bump last month. 

Driving this drop in poll numbers is a growing consensus among voters that Trump was too slow to respond to the pandemic when it first appeared in China in December.

Yet as scrutiny of Trump's early response has increased in recent weeks, serious questions have also arisen about China, and why authorities there withheld early reports of a new virus in the city of Wuhan. A Chinese foreign ministry spokesman said this week that China's government "has been nothing but open, transparent and responsible" in sharing information about the outbreak since it began.

American public approval of China is also falling sharply. According to a recent Pew survey, the percentage of Americans who hold an unfavorable opinion of China more than doubled in March, from 30% to 66%. The survey also found that 62% of Americans consider China's power and influence to be "a major threat" to the United States. Likewise, a Gallup poll released in March revealed that favorable views of China were at an all-time low among U.S. adults.

China's mistakes presented Trump's campaign and its related groups with an opportunity: a chance to shift the blame for America's sky-high infection rates away from Trump and his failure to adequately prepare the U.S., and onto China and its failure to communicate with the world. 

China as the target 

The new marching orders swept through GOP messaging channels seemingly overnight: After months of creating ads with names like "Stronger" and "Keep it Up," on April 9, the Trump campaign released "Biden stands up for China."

Within days, a web of pro-Trump campaign committees, outside groups and surrogates had all found their way to the same message: Attack China.

The Trump campaign's ad featured old clips of the Democratic former vice president and the tagline: "Biden stands up for China while China cripples America." 

The campaign also sent an email asking donors to "give President Trump the necessary funds to hold China accountable." China, it said, has been "lying and doing everything they can to cover up the spread of Covid-19." 

Last week, the leading pro-Trump super PAC America First Action released three new TV ads that accused Biden of things like making "China great." "To stop China, you have to stop Joe Biden," says a somber narrator in one ad. America First says it will spend $10 million to run the ads in the swing states of Michigan, Pennsylvania and Wisconsin. 

The email and the ads were accompanied by media appearances from top officials in the White House and the Trump campaign. Everyone was on the same message.

But while everyone around him was bashing China, Trump saw his China trade deal as a key part of his overall plan to help the U.S. economy recover from the impact of coronavirus. "Approximately $50 billion is expected to be with our farmers," Trump said April 7, referring to China's obligation to purchase U.S. agricultural products under the deal. "That should have a huge impact on our farmers — a tremendous impact on our farmers. But we're watching it very closely."

Purely as a campaign theme, bashing China tends to be effective for Republicans, GOP strategist Heye said. "In Republican politics, you can never be anti-China enough."

President Donald Trump delivers remarks at a Keep America Great Rally at the Rupp Arena in Lexington, Kentucky, November 4, 2019.
Yuri Gripas | Reuters

"Trump's voters also love that he fights," Heye added, and they don't mind his trade wars. "They respect that he's trying something different" after decades of both parties embracing free trade. 

Attacking China over trade is also part of a long political tradition in the United States, said Alexandra Guisinger, a political science professor at Temple University and an expert in trade.

"The message that there is a threat coming from Asia is handed to the American people rather often," she said, and even more so during economic downturns. 

"In general, the protectionist campaign seems to be a strategy that works," she said. "In this particular year, in this economy, my research shows that's a message that voters will respond to." 

Kelly Sadler, a spokeswoman for America First Action, also pointed to China's shrinking popularity with U.S. voters. "These opinions will not fade this year, as we work to recover from the economic and health fallout of the coronavirus," she said in an email to CNBC.

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Real world risks

If Trump were to go on the attack against Beijing right now, the way his reelection team has proposed, the consequences could reverberate far beyond the campaign trail. 

"Trump's campaign is taking a real risk if it intends to make China into an election-year boogeyman," said Jessica Chen Weiss, a professor of government at Cornell University and an expert in China's domestic politics.

"The Chinese leadership is savvy enough to understand that campaigning isn't policy, but right now we're in an especially delicate moment," she said, "as party leaders make decisions about what to do next." 

A Trump campaign spokesman did not respond to questions from CNBC about its strategy. 

As long as American towns and cities are still reporting new Covid-19 outbreaks, the country will continue to depend upon China to supply its overloaded health system.  

Health workers wheel a body from the Wyckoff Heights Medical Center in the Brooklyn borough of New York City.
Brendan Mcdermid | Reuters

"Now, more than ever, the U.S. economy needs China's support to provide goods to the retail market, purchase American products, deliver medical supplies and protective equipment, and soon, to share the vaccine that's being developed there," said Weiss.

She also noted that promises to "hold China accountable" for the pandemic have no basis in the real world. "There is no accountability mechanism and no modern reparations system for pandemics," Weiss said.

Nonetheless, threats like these do have a real-world impact: They infuriate Beijing.

China as Trump's trophy

During his daily coronavirus briefings, Trump comes across as reluctant to directly attack China over the pandemic. For a politician who built his brand on promises to punish China for a host of sins, it feels like there's something missing.

And it's not as though Trump is afraid that reporters will ask him about his long, public record of praising China's leadership for its handling of coronavirus. Reporters do press him, and the president has no problem denying, rejecting and ignoring his past statements. 

Trump points out that he barred entry to travelers from China in late January, one of his first significant policy steps to combat coronavirus. But he stops well short of suggesting that China is a clear and present danger to the United States. 

On April 17, Trump left open the possibility that China's alleged reporting failures and cover-ups were innocent "mistakes," a term U.S. intelligence officials and diplomats rarely use.

"If it was a mistake: a mistake is a mistake," Trump said. "But if [China] were knowingly responsible, yeah, then there should be consequences."

One reason Trump hasn't embraced the narrative that China is America's greatest threat is that he has his own personal story of his presidency. And in that narrative, China is not America's greatest threat precisely anymore because of what Trump has done in office. 

Instead, China is a defeated foe, a former adversary turned partner that is now going to pay "$250 billion" in recognition of Trump's victory on the battlefield of global trade. 

This new China was going to be a pillar of Trump's reelection narrative before coronavirus, a symbol of his victory over all the countries that he claimed were taking advantage of the United States. If China was still our gravest threat today, as it was in 2016, it would mean that Trump had not defeated it.

At one of his last campaign rallies before he suspended them, in Des Moines in late January, Trump told supporters the China trade deal he had signed two weeks earlier was going to make them all rich. 

"Enjoy your life. You're going to make a lot of money. Because they respect us now, they didn't respect us. We have never had a better relationship with China than we do right now. It's a beautiful story. They respect us. The whole world respects us now," Trump said. 

In some ways, Trump wasn't exaggerating. The deal was a political triumph for the president, and it fulfilled a major 2016 campaign promise he had made to voters.

"It is historic that tariffs did succeed," Jim Cramer, host of CNBC's "Mad Money," said in January. "Tariffs were not supposed to work. The Chinese were supposed to be able to get around them. It didn't happen."

And today, four months later, the deal is actually being implemented, mostly with the U.S. and China adjusting import/export rules for things like beef and nectarines.

President Donald Trump holds the trade agreement with Chinese Vice Premier Liu He in the East Room at the White House on Wednesday, Jan 15, 2020.
Jabin Botsford | The Washington Post | Getty Images

During these same four months, the coronavirus pandemic that originated in China has ripped through every state in the union, infected more than 880,000 people, killed more Americans than 15 9/11 attacks combined and triggered an unparalleled economic crisis around the world. 

Both events involve China. But one is measured in tangerines, and the other in mass deaths.

Still, Trump insists on weaving the two together when he talks about China. And in Trump's speeches, China's obligation to adhere to his trade deal and China's obligation to alert the world about coronavirus are often indistinguishable.  

Earlier this month, Trump suggested that U.S. collaboration with China on fighting the pandemic was contingent on Beijing honoring his trade deal. 

"We just signed a trade deal," Trump said in response to a question about collaboration. "It's the biggest deal probably ever made. And I hope they're going to honor that trade deal. If they don't honor the trade deal, then I'll tell you a different answer, but I think they will," Trump said.

"Do you want to walk back the time when you praised China in January for being transparent about the coronavirus?" a reporter asked Trump at a recent briefing. 

"The trade deal we have, they have to give us $250 billion in purchases," Trump said. "Let's see if they do that. Now, if they don't produce [the $250 billion], or if we find out bad things [about China's early coronavirus response], we're not going to be happy."

The message is clear — China's willingness to maintain its trade commitments and its culpability for not doing more to stop the deadly pandemic will be judged together and carry the same weight with Trump.

For Republican Heye, the simple fact that Trump's concerns about China backing out of the trade deal are factoring into his response to the coronavirus underscores how much Trump "has managed to box himself in on China." 

"After slapping everyone with tariffs for three years and forcing countries like China into trade deals they didn't want, Trump has created a situation where now he needs to appease China," said Heye, "or else he risks Beijing kicking the stool out from under one of his core issues."

Trump's political interests may not be the only ones driving his apparent reluctance to cross Beijing: His financial interests could also be on the line.

Trump's real estate and resort company has also had myriad financial ties to China, including financing by the state-controlled Bank of China for one of Trump's marquee properties, a 43-story building on the Avenue of the Americas in New York City, in which Trump owns a 30% stake. The loan for the property comes due in 2022, according to a Politico report Friday. 

After the Politico story was published, the Bank of China said it securitized and sold the debt in 2012. But the bank was still listed as a creditor on the property in a 2017 filing with the City of New York, and in a database of securitized mortgages. Bank of China said this was due to a "technical error."

Next steps

It's unclear how long Trump can protect his trade deal and the victory it represents from the realities of politics in the age of coronavirus. New pressures are surfacing all the time. Recently, intelligence emerged that indicates China is waging a covert information war to foment panic in the United States. 

Domestically, China is silencing critics of its early response to the pandemic and using state media and propaganda tools to create a triumphalist narrative about it. Beijing is also demanding praise from governments around the world in exchange for providing medical supplies and knowledge about the virus. 

Chinese President Xi Jinping inspects the coronavirus pneumonia prevention and control work in Beijing, on Feb. 10, 2020.
Pang Zinglei | Xinhua News Agency | Getty Images

In response, some members of the Trump administration are taking a stance against China that leaves no room for the president's detente, especially Secretary of State Mike Pompeo. 

Speaking to the press on Wednesday, Pompeo ticked off an extensive list of what he said China had done wrong.  

"China covered up how dangerous the disease is. It didn't report sustained human-to-human transmission for a month until it was in every province inside of China. It censored those who tried to warn the world, it ordered a halt to testing of new samples, and it destroyed existing samples," said Pompeo. 

For Trump, however, the so-called invisible enemy of the virus is still wrapped up with the trade deal, at least for now. 

But that could be changing. Asked about the China deal on Tuesday, Trump let slip a whisper of his 2016 campaign message.

"Great things were happening [with China] except, all of a sudden, out of nowhere, came the invisible enemy. And we think we know where it came from, and we'll be talking about that probably a lot," Trump said. "There's been nobody tougher than me on China." 

Trump admitted he has no guarantee that China will not back out of the deal because of the pandemic.

"But if that happens," he said, "we'll do a termination and we'll do what I can do better than anybody."

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UPDATE: This story has been updated to include a response from the Bank of China.