China Blames Trump for Its Decision to Reneg in Trade Talks

China is seeking to blame its decision to retreat on commitments it made in trade talks with the U.S. on President Donald Trump, according to the Wall Street Journal.

Specifically, the Journal quotes unnamed sources as saying that Chinese officials read Trump’s public battles with the Federal Reserve over interest rates as a signal that the U.S. economy was weak and so the U.S. might be in a vulnerable enough position that it would acquiesce to China’s toughened stance.

Also, Trump said so many nice things about his relationship with Xi Jinping that China thought he might give them a break on the trade deal.

From the Wall Street Journal:

The hardened battle lines were prompted by Beijing’s decision to take a more aggressive stance in negotiations, according to the people following the talks. They said Beijing was emboldened by the perception that the U.S. was ready to compromise.

In particular, these people said, Mr. Trump’s hectoring of Federal Reserve Chairman Jerome Powell to cut interest rates was seen in Beijing as evidence that the president thought the U.S. economy was more fragile than he claimed.

Beijing was further encouraged by Mr. Trump’s frequent claim of friendship with Chinese President Xi Jinping and by Mr. Trump’s praise for Chinese Vice Premier Liu He for pledging to buy more U.S. soybeans.

In other words, if tariffs go up and the trade talks fall apart, it will all be Donald Trump’s fault.

This Taylor Swift defense–“Look what you made me do”–sounds implausible. Actual economic data on the U.S. economy shows that it is very strong. The economy grew at a 3.2 percent rate in the first quarter, up from 2.2 percent at the end of 2018. Job creation has been much stronger than expected and unemployment has fallen to 3.6 percent. Inflation has been running very low, showing that tariffs on Chinese goods haven’t pinched U.S. consumers.

But just as there is widespread suspicion in the U.S. that China’s official economic statistics cannot be trusted to accurately portray reality, some in China’s communist party do not trust U.S. data and argue that they are designed to exaggerate U.S. strength.

And there is a history of China misreading what its leaders took as signals from U.S. leaders. But this would seem to be a huge blunder on the part of China if it is truly the explanation for why they reneged on their commitments.

A simpler explanation of China’s behavior was offered this week by Michael Pillsbury, author of the groundbreaking book The 100 Year Marathon, in a Wall Street Journal opinion piece. According to Pillsbury, “it’s hardly surprising that the long-negotiated deal appears to be falling apart. China has been busy in these final three weeks trying to weaken the deal. That’s Beijing’s modus operandi: String the West along, then renegotiate and take back earlier concessions from the gullible ‘barbarians.'”

China has a long history of quickly breaking commitments it makes with the U.S. This time around, however, they did not even wait for the deal to be done before trying to undermine it.