Trade wars have led to both World Wars

While trade war threats ramp up between Donald Trump and China there’s a timely warning that major trade wars have contributed to escalations into both World Wars.

CNBC: Trump says he’s ‘ready’ to put tariffs on all $505 billion of Chinese goods imported to the US

  • President Donald Trump has indicated he is willing to put tariffs on all $505 billion of Chinese goods the U.S. imports.
  • The rhetoric ramps up the U.S.-China trade war another step, though each country has issued just $34 billion in tariffs so far.

President Donald Trump has indicated that he is willing to slap tariffs on every Chinese good imported to the U.S. should the need arise.

“I’m ready to go to 500,” the president told CNBC’s Joe Kernen in a “Squawk Box” interview aired Friday.

“I’m not doing this for politics, I’m doing this to do the right thing for our country,” Trump said. “We have been ripped off by China for a long time.”

Trump said the U.S. is “being taken advantage of” on a number of fronts, including trade and monetary policy. Yet he said he has not pushed the tariffs out of any ill will toward China.

“I don’t want them to be scared. I want them to do well,” he said. “I really like President Xi a lot, but it was very unfair.”

From The Diplomat: Trump’s Trade War on China Is About More Than Trade

Against this backdrop, the trade war can be viewed as a paradigm shift of Washington’s China policy. Along with other recent developments in U.S. policy, such as the Taiwan Travel Act passed in February and the passage of U.S. Navy warships through the Taiwan Strait, the trade war is, in effect, part of a much larger strategy of hedging.

Once we realize that the trade war is not merely about trade, we can then appreciate the very real potential for large-scale conflict between the United States and China.

Dene Mackenzie at ODT looks at some history: Trade wars catalysts for world war, the past teaches

History often repeats itself if we do not learn from it. The two full-blown trade wars some 80 and 100 years ago helped to ignite the two world wars.

Trade wars can also cause currency wars.

The end of  World War 1 sparked the first worldwide currency war, starting in Weimar Germany in 1921, followed by France in 1925. In the end, all the major economies scrambled to devalue their currencies — sterling, the franc and the US dollar — throughout the 1930s.

In 1930, US president Herbert Hoover signed into law the Smoot-Hawley Tariff Act, which intensified the currency war and deepened the Great Depression. The protectionist law raised tariffs on more than 20,000 imported products and triggered retaliation by many of the United States’ trading partners.

Trade wars stoke nationalism and hatred among people and finally trigger wars, as evidenced by the breakout of World War 2.

The Japanese invaded Manchuria in 1931, and the whole of China in 1937; the Germans invaded Poland in 1939, then the rest of Europe; and the Japanese attacked Pearl Harbour in 1941.

A quote often attributed to the 19th-century French economist, Frederic Bastiat, goes: “When goods do not cross frontiers, armies will”.

The geopolitical situation has changed a lot over the last two centuries – but as WW1 and WW2 showed, military might and technology has increased substantially. The risks are much higher when nuclear armed countries are involved.

Especially now when the erratic and loose-mouthed Trump is on one side of the tensions.

We don’t want to hear “I meant yesterday that I definitely wouldn’t be launching missiles immediately, not would“.

The trade war with the US could not have come at a worse time  for China, which had just begun focusing “in earnest” on fixing problems in its economy, JP Morgan analysts said on Wednesday.

…those indirect effects could lead to large collateral damage, they said.

There’s a lot of gamesmanship going on, and there are also major risks to local economies and the world economy.

Bluster and threats are often eventually moderated by discussions and negotiations leading to reasonable solutions. But not always.

There’s also always risks of things escalating into military war.

China response to Defence Policy Statement criticisms

A Strategic Defence Policy Statement released on Friday by Minister of Defence Ron Mark stated the threat it believes China poses to the international community.China has responded.

Stuff: China fires back at NZ, calls remarks on South China Sea and Pacific politics wrong

Foreign Minister Winston Peters and Prime Minister Jacinda Ardern have often been careful not to specifically call out the country when talking about international tensions in the South China Sea, or over development spending in the Pacific.

But the defence statement explicitly listed what the Government saw as potential threats posed by China.

Mark’s paper said “both domestically and as a basis for international engagement, China holds views on human rights and freedom of information that stand in contrast to those that prevail in New Zealand”.

It went on to say “not all major powers’ aspirations can be shaped in accordance with the rules-based order, in the way that had been hoped until recently”.

On Friday, Mark said the statement would come as no surprise to China.

But on Monday, Peters said the Chinese Government had made clear its concern over the paper, both through its ambassador in Wellington and New Zealand’s ambassador in Beijing, but played down the significance of this.

China’s foreign ministry spokeswoman Hua Chunying said China had “lodged stern representations with New Zealand on the wrong remarks it has made on China”.

“We urge New Zealand to view the relevant issue in an objective way, correct its wrong words and deeds and contribute more to the mutual trust and cooperation between our two countries,” she said.

The Global Times, one of the official newspapers of the Communist Party of China, says similar: Australia, New Zealand should avoid misrepresenting China’s role

While acknowledging China’s contributions to the international order, New Zealand accused China of having not “consistently adopted the governance and values championed by the order’s traditional leaders” in its Strategic Defense Policy Statement 2018. It also alleged that “China’s more confident assertion” of interests in Asia has “raised tensions” with neighboring countries.

The Washington-led international policy pattern has gradually turned out to be inadaptable to today’s development. Worse still, Washington, unwilling to accept China’s rise, has been working to drive a wedge between China and Asia-Pacific countries, further destabilizing the region. As a result, China has been seeking every opportunity to cooperate with regional countries for fairer orders.

It would be a strategic mistake if the security pact is clinched to target China. To begin with, China has risen to the second largest economy in the world. Its economic might is being gradually transformed into a locomotive for regional cooperation.

A hint of a warning in trade, which is always a factor in international relations. New Zealand has a growing reliance on trade with China.

More importantly, China’s role in the South Pacific is actually welcomed by a majority of countries there. China has emerged as a major donor in the South Pacific, including in Forum countries Fiji, Vanuatu and Papua New Guinea, instilling momentum to the region’s development. China provided $1.8 billion in aid and loans to South Pacific nations between 2006 and 2016, according to media reports.

That’s a lot of aid, far more than New Zealand (or Australia) could give.

How to share the developmental dividends of China’s rise is a subject that the international community should ponder on. China’s emergence is an irreversible trend, and any attempt to contain the country’s growth runs contrary to the trend of the times.

Instead of being overly cautious about China’s rise, Australia and New Zealand should avoid misleading the region on China’s role, and other regional countries should be clear about the consequences of being misled. The region will only suffer more losses from containing China.

Dealing with China is a tricky balance.

Ardern and peters have to deal with diplomacy and consider trade far more than Mark who is more removed from the overall realities of international relationships in his defence role.

Trump accuses China of sabotaging North Korea ‘deal’

Donald Trump and Kim Yong Un made a fairly vague agreement in Singapore a month ago.

US Secretary of State Mike Pompeo has just visited North Korea and the outcome of that meeting looks shaky, despite Pompeo’s positive report:

“We had many hours of productive conversations. These are complicated issues, but we made progress on almost all of the central issues. Some places a great deal of progress. Other places, there’s still more work to be done.”

See North Korean denuclearisation talks with US Secretary of State – “regrettable”. It has also been reported that North Korea accused Pompeo of acting like a gangster.

Since then Trump has tried to blame China, and added trade to the mix of rhetoric.

Republican Senator Lindsey Graham has also accused China of interfering: China Sabotaging North Korea Nuclear Talks Over Tariff Trade War

SEN. LINDSEY GRAHAM (R-SC), SENATE ARMED SERVICES COMMITTEE: I see China’s hands all over this. We are in a fight with China. We buy $500 billion worth of goods from the Chinese. They buy $100 billion from us. They cheat and President Trump wants to change the economic relationship with China.

So, if I were President Trump, I would not let China use North Korea to back me off of the trade dispute. We’ve got more bullets than they do when it comes to trade. We sell them $100 billion, they sell is $500 billion, we can hurt them more than they will hurt us. And all we’re looking for is for them to stop cheating when it comes to trade.

There’s no doubt in my mind that it’s the Chinese pulling a North Koreans back. And to our North Korean friends, can’t say the word friend yet. You asked Pompeo, did he sleep well? If you knew what I knew about what we could do to the leadership of North Korea, you wouldn’t sleep very well.

Threatening words from Graham on top of Trump’s Twitter bombast.

China and North Korea border each other and have been closely connected politically for a long time. China supported the north in the Korean war in the 1950s.

Kim visited China before his summit with Trump, and he has been back to China since.

So of course China has some sort of influence in North Korea. Are they “exerting negative pressure”? I guess that depends what side of the political and international fence you are on.

Threatening “more bullets” in the escalating trade war with China and threatening “If you knew what I knew about what we could do to the leadership of North Korea, you wouldn’t sleep very well” could be  interpreted as a bit of negative pressure too.

I just hope trade and military relations don’t go into a negative spiral that ends up in a crash and burn.

US-China trade war heats up

World trade is increasingly at risk as the US-China trade war kicks in and heats up.

Reuters: Trump’s $500 billion trade threat makes China’s already battered investors shiver

Six months of wrangling over trade tariffs with the United States has wiped out about a fifth of China’s stock market value and driven its currency down sharply. But those moves may have just been a downpayment on what is yet to come.

Shanghai’s benchmark share index .SSEC is down roughly 22 percent since January, when U.S. President Donald Trump’s first trade tariffs on solar panels were announced. It has fallen 9 percent since June 19, when Trump outlined his plans to tax a lot more Chinese imports than he initially proposed.

Tariffs on the first batch of $34 billion worth of Chinese imports kicked in on Friday. Beijing said it had no choice but to respond in kind by taxing a similar amount of U.S. goods coming into China. U.S. tariffs on another $16 billion of Chinese goods are due to go into effect in two weeks, Trump said on Thursday.

But Trump also raised the temperature much further by telling reporters that after the initial $50 billion of goods has been targeted with tariffs, Washington could add another $500 billion.

With Beijing indicating it will respond with tariffs on more U.S. imports or other corresponding actions of its own, the specter of a full-blown trade war risks sinking China’s markets deeper into bear territory.

This could get very ugly, and New Zealand could easily be affected.

NZH: How US-China trade war could affect NZ

With a trade war brewing between two of the world’s biggest economies, China is more likely to be prepared to agree to more favourable terms in the upgrade of its Free Trade Agreement with New Zealand.

Short-term there is potentially some upside for New Zealand if producers here can replace some of the American products in China.

This is where our FTA talks can help, to position these short-term opportunities as long-term realities. And the Chinese may be appreciative if we show good faith, which we have done in the past.

If we show good faith to China in a trade war Trump may not view us very favourably.

Trade Minister David Parker…acknowledged the proposed e-commerce chapter in the upgraded FTA is of particular importance to New Zealand.

It’s a difficult issue as the Government is moving to reform our GST rules on online shopping, which is likely to act as a barrier to expanded e-commerce.

Imagine what headaches it could bring to Kiwi exporters if China introduces a similar rule and New Zealand exporters are required to register for VAT in China?

There are a lot of ‘what ifs’ in the international trade arena at the moment. I don’t think anyone can know how it will pan out.

US-China trade war escalates

The on again, off again trade war between the US and China is escalating, with more tariff threats from both countries.

Trump aims to hit China as tit-for-tat tariff war erupts

A top U.S. trade adviser said China has underestimated President Trump’s resolve to press ahead with tariffs, in comments that undercut the chances of settling a looming trade war between the economic superpowers.

The threat of a growing trade conflict with China hit financial markets hard, with Beijing vowing a firm response after Trump on Monday said he would implement tariffs on an additional $200 billion of imports from China if Beijing went ahead with reprisals over an initial set of U.S. tariffs.

White House trade adviser Peter Navarro, a sharp critic of Chinese trade actions, said China has more to lose from any trade war.

“The fundamental reality is that talk is cheap,” Navarro told reporters on a conference call, again accusing China of “predatory” trade policies.

When it comes to stoking a major trade war talk could be quite expensive to both countries, and potentially to others including New Zealand.

The threat of new tariffs against China pits the world’s two largest economies against each other and looks set to disrupt global supply chains for the tech and auto industries, two sectors that rely heavily on outsourced components.

In total, Trump has now threatened up to $450 billion in Chinese imports with tariffs, including another $200 billion in Chinese goods if Beijing retaliates after the step Trump announced on Monday.

Mounting concerns over the U.S.-China dispute sent global stock markets skidding and weakened both the dollar and the Chinese yuan on Tuesday. Shanghai stocks plunged to two-year lows.

The Dow Jones is still trading in the US Tuesday and is currently down 1.18% for the day. That isn’t a drastic drop.

This could all have significant impact in this part of the world – From the Aussie to soybeans and cars: what’s at risk in a trade war?

The Aussie dollar takes a thumping, soybean prices swing and German carmaker shares are stuck in reverse.

Countries with open economies reliant on global trade are most at risk when disputes over international commerce hit.

The Australian dollar ticks those boxes. Australia counts China as its biggest trading partner and its currency is heavily correlated to global growth. Many investors see the currency, known as the Aussie, as a better global trade bellwether than the Canadian dollar, which has been buffeted by negotiations over NAFTA, the North American trade pact.

This week, the Aussie fell to its lowest level in 13 months, and the positioning of options signal more weakness ahead.

If Australia is badly affected that must have an impact here. New Zealand is also at risk directly with US and Chinese trade upheaval.

Odd US embassy illnesses

Numbers of US staff at both their Cuban and Chinese embassies have been reported to have suffered from similar mysterious illnesses.

MSN: U.S. evacuates China consulate staffers as illness mystery deepens

The United States has evacuated some Americans from its consulate in the Chinese city of Guangzhou after an employee was confirmed to be suffering symptoms consistent with the mysterious illness that led to the removal of more than half of the U.S. Embassy staff in Cuba, the State Department said Wednesday.

Heather Nauert, the State Department’s spokeswoman, said “several” consulate employees had returned to the United States from China for further evaluation after they were screened as part of a task force Secretary of State Mike Pompeo created last month. The force is investigating reports of hearing, vision, balance and memory damage.

The State Department said in a health alert last month that the employee in Guangzhou reported “subtle and vague, but abnormal, sensations of sound and pressure” that had no immediate explanation. Pompeo said then that the employee’s symptoms were eerily similar to those reported by the Cuban embassy staff.

Doctors said in February that the symptoms among some 24 Havana embassy staffers were similar to those caused by concussions — headaches, balance problems, sleep disturbances and visual and hearing difficulties.

U.S. experts have said they know of no technology that would explain the symptoms.

But President Donald Trump and other U.S. officials have accused Cuba of having targeted U.S. personnel with some kind of “acoustic sonic weapon” for unknown reasons, an allegation the Cuban government has forcefully denied.

The State Department responded by pulling 60 percent of its workers out of the Havana embassy in early October and expelled two-thirds of Cuba’s staff in Washington.

Have they considered it could be US technology used to screen and block eavesdropping that could be having an adverse effect on their embassy employees?

Trade wars on again in response to Trump’s interventionism

It’;s hard to keep up with Donald Trump’s varying positions on a number of issues, but it looks like trade wards are back on after he imposed tariffs in steel and aluminium imports.It’s too soon to tell what this may escalate into, but the signs look ominous.

Reuters: U.S. isolated at G7 meeting as tariffs prompt retaliation

U.S. President Donald Trump told Canada and the European Union on Friday to do more to bring down their trade surpluses, a day after hitting them and Mexico with import tariffs on steel and aluminum.

Trump castigated Canada, a top U.S. trade partner and ally, in a tweet on Friday morning, saying it had treated U.S. farmers “very poorly for a very long period of time.”

“Highly restrictive on Trade! They must open their markets and take down their trade barriers! They report a really high surplus on trade with us,” he wrote.

Trump also told French President Emmanuel Macron of the need to “rebalance trade with Europe,” the White House said.

The strong words followed swift responses to the tariffs by Canada, Mexico and the EU, which all plan to retaliate with levies on billions of dollars of U.S. goods, including orange juice, whiskey, blue jeans and Harley-Davidson motorcycles.

ODT: Trade war repercussions likely

By later today,  or early tomorrow, it will be known the extent to which Europe, Canada and Mexico will go to counter the United States’ tariffs.

Canada and Mexico have made early moves but there are suggestions more barriers will be put in place for US exports.

US President Donald Trump unilaterally imposed sweeping tariffs on  steel and aluminium imports from the European Union, and its Nafta trading partners Canada and Mexico.

European commissioner Jean-Claude Juncker is promising to have retaliatory measures in place. In a furious address to a conference, Mr Juncker was threatening like for like, enough to make free-trade countries like New Zealand shudder.

The move is likely to have an immediate impact on global trade in steel and aluminium, particularly between the US and Canada, the largest supplier of imported steel to the US.

A meeting of the Group of Seven, in Canada, was taken by surprise by the announcement. Concern about Mr Trump’s hardening approach to trade dominated the discussion panel as top policy makers from the United States, Britain, Germany, France, Italy, Japan and Canada gathered in the alpine village of Whistler, British Columbia, Canada.

There is growing concern trade wars may turn into real wars — particularly with the ongoing tit-for-tat squabble between China and the US.

On Tuesday, the White House pledged to slap an additional 25% tariff on a long list of Chinese products, including metals. Within hours Beijing retaliated with the promise to lift levies on $US50 billion worth of US imports by 25%. The Chinese list includes soybeans, automobiles, chemicals and aircraft. In response, Mr Trump threatened an additional $US100 billion in tariffs against China.

Global supply chains are at risk from the actions being initiated by Mr Trump and, because of his powerful position and erratic behaviour, no-one knows for sure how this will play out.

Mr Trump’s posturing is damaging to not only global trade. He is facing a backlash from some of his Republican allies, who are now worrying about surviving midterm elections.

The bigger fear over the current conflict is how escalating retaliatory tariffs may undermine institutions such as the World Trade Organisation, which have underpinned the world trading system since the aftermath of World War 2 and have prevented the outbreak of major trade wars.

Reuters:

Trump’s tariffs on Washington’s closest allies also drew condemnation at home from Republican lawmakers and the country’s main business lobbying group and sent a chill through financial markets.

The US markets keep bouncing around:

This year they have been as erratic as Trump, which is no coincidence.

While steel and aluminium tariffs may help protect some US industries they are likely to raise prices on many products that use steel and aluminium.

These particular tariffs aren’t likely to impact greatly on New Zealand, but if it escalates into a wider trade war then we are likely to get tossed around in the storm.

Meanwhile Trump is trying to prop up some big business friends: Trump orders Energy Department to help ailing coal, nuclear plants

U.S. President Donald Trump on Friday directed Energy Secretary Rick Perry to take emergency steps to keep at-risk coal and nuclear plants running, the White House announced.

Under the directive, Perry would require grid operators to buy electricity from ailing nuclear and coal-fired power plants to keep them from being shuttered.

Trump is an erratic interventionist.

China-US trade war on hold, deal pending

The risk of a trade war between the United States and China has diminished after a deal has been made, which means threatened US tariffs and counter tariffs from China may be scrapped.

Avoiding a trade war is better for both countries – and for world trade – than trying to win a war that would adversely affect both countries.

RNZ (BBC): Trade war on hold as US and China halt imposing tariffs

China and the US say they will halt imposing punitive import tariffs, putting a possible trade war “on hold”.

The deal came after talks in the US aimed at persuading China to buy $US200 billion of US goods and services and thereby reduce the trade imbalance.

The US has a $335b annual trade deficit with Beijing.

In March this year, Mr Trump announced plans to impose tariffs on Chinese imports – mainly steel and aluminium.

Beijing threatened equal retaliation, including tariffs on a number of US imports – among them aircraft, soybeans, cars, pork, wine, fruit and nuts.

Two days of talks ended in Washington DC on Friday with a framework agreement.

US Treasury Secretary Steven Mnuchin…

…told Fox News on Sunday that China would buy more US goods “to substantially reduce the trade deficit”.

Concrete numbers had been agreed, he said, although he refused to disclose if this meant China was buying $200bn in return for the US threat to be lifted. US Commerce Secretary Wilbur Ross would travel to China soon, he said, to work on details, which would involve industries – not just the two governments.

“We are putting the trade war on hold. Right now we have agreed to put the tariffs on hold while we try to execute the framework” of the agreement, Mr Mnuchin said.

But he warned that failure to implement it would result in the imposition of the threatened US tariffs.

Chinese vice-premier Liu He…

…said his visit to the US had been “positive, pragmatic, constructive and productive”.

He described a “healthy development of China-US economic and trade relations” which would result in enhanced co-operation in areas such as energy, agriculture products, healthcare, high-tech products and finance.

“Such co-operation is a win-win choice as it can promote the high-quality development of the Chinese economy, meet the people’s needs, and contribute to the US effort to reduce its trade deficit,” he added.

Mr Mnuchin said the new framework agreement included structural changes to Chinese economy to enable fair competition for US companies, but this would take time, China’s vice-premier said.

And, perhaps because of that, he said the two countries “should properly handle their differences through dialogue and treat them calmly in the future”.

That’s a much better threat than making public threats and launching a trade war. But as is normal with the trump administration, there is some uncertainty.

Reuters: U.S., China putting trade war on hold, Treasury’s Mnuchin says

Trump’s top economic adviser, Larry Kudlow…

…told CBS “Face the Nation” it was too soon to lock in the $200 billion figure. “The details will be down the road. These things are not so precise,” he said.

Trump was in a “very positive mood about this,” Kudlow said.

However, he said there was no trade deal reached.

“There’s no agreement for a deal,” Kudlow told ABC. “We never anticipated one. There’s a communique between the two great countries, that’s all. And in that communique, you can see where we’re going next.”

One next step will be dispatching Commerce Secretary Wilbur Ross to China to look at areas where there will be significant increases, including energy, liquefied natural gas, agriculture and manufacturing, Mnuchin and Kudlow said.

So there is a lot of work to do yet.

The star of Donald?

The Trump versus Iran situation is a high risk international play, with Trump having isolated the US from Europe and other allies, apart from Israel, and he is talking big on threats against Iran (who is close to Russia and China).

Who knows what might happen now? No one can do anything but guess and hope.

Perhaps the star of Donald will shine peace on the Middle East. It would be an unprecedented international success.

But it could as easily turn to custard in an already very lumpy region of the world. In distance countries we must hope that it doesn’t become nuclear custard – the level of Trump’s current rhetoric can easily be interpreted as threats of a big bang.

The danger is that one day Trump may paint himself into a corner, and either have to back down bigly, or push a very dangerous button.

We may end up with the mushroom of Donald.

Trump looking at US rejoining TPP

Reports from the US say that President Trump has instructed advisers to look at re-entering the Trans-Pacific Partnership trade agreement, a month after it was signed by the remaining eleven countries, including New Zealand.

This looks to be a reaction to pressure from US farmers over Trump’s trade war with China,.

During the 2016 campaign Donald Trump spoke strongly against the TPP. As soon as he took office he withdrew the US from the agreement. Perhaps he thought that would kill the hole deal, but the the TPP progressed without the US, was renamed the CPTPP and was signed by the other eleven countries last month in Chile.

President Obama had promoted US participation in the TPP.

January last year: Trump Abandons Trans-Pacific Partnership, Obama’s Signature Trade Deal

President Trump upended America’s traditional, bipartisan trade policy on Monday as he formally abandoned the ambitious, 12-nation Trans-Pacific Partnership brokered by his predecessor and declared an end to the era of multinational trade agreements that defined global economics for decades.

With the stroke of a pen on his first full weekday in office, Mr. Trump signaled that he plans to follow through on promises to take a more aggressive stance against foreign competitors as part of his “America First” approach. In doing so, he demonstrated that he would not follow old rules, effectively discarding longstanding Republican orthodoxy that expanding global trade was good for the world and America — and that the United States should help write the rules of international commerce.

Although the Trans-Pacific Partnership had not been approved by Congress, Mr. Trump’s decision to withdraw not only doomed former President Barack Obama’s signature trade achievement, but also carried broad geopolitical implications in a fast-growing region. The deal, which was to link a dozen nations from Canada and Chile to Australia and Japan in a complex web of trade rules, was sold as a way to permanently tie the United States to East Asia and create an economic bulwark against a rising China.

Mr. Trump’s decision to scrap the Trans-Pacific Partnership, or T.P.P., reversed a free-trade strategy adopted by presidents of both parties dating back to the Cold War, and aligned him more with the political left. When he told a meeting of union leaders at the White House on Monday that he had just terminated the pact, they broke into applause.

“We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country, and it’s going to be reversed,” Mr. Trump told them, saying that from now on, the United States would sign trade deals only with individual allies. “I think you’re going to have a lot of companies come back to our country.”

Earlier this year, when it looked like the deal would go ahead without the US, there were signs Trump was rethinking, and now Senators there say he has instructed advisers to look at re-entering the deal.

CNBC: Trump told his advisors to look at re-entering massive Pacific trade deal, senators say

  • Senators say President Donald Trump wants his advisors to reconsider entering the TPP.
  • Lawmakers from agricultural states met with the president about the possible harm to farmers from Chinese retaliation to Trump’s proposed tariffs.
  • Trump left the massive 12-nation deal agreed to by President Barack Obama, and the remaining 11 nations reached a new agreement.

The president said he has instructed chief economic advisor Larry Kudlow and U.S. Trade Representative Robert Lighthizer to consider trying to rejoin the Trans-Pacific Partnership, said Sens. Pat Roberts, R-Kan., and Ben Sasse, R-Neb. The senators were among the lawmakers from agricultural states who met with Trump on Thursday about the White House’s proposed tariffs on China, which farmers worry would lead to retaliation that hurts their businesses.

After the meeting, Sasse told reporters the 12-nation trade deal agreed to by President Barack Obama and abandoned by Trump would be the “single best way” to counter alleged Chinese trade abuses.

“That cheating needs to be countered. But the single best way we can counter that is by leading all the rule of law nations in the Pacific who would rather be aligned with the U.S. than be aligned with China,” he said.

With the original deal, the nations intended in part to counter China’s economic influence in the region.

In January, Trump told CNBC he would join TPP again if he could make a “substantially better deal.” He argued the agreement as previously crafted was “terrible.”

On Thursday, Sasse suggested Trump thinks the U.S. could still join in on the agreement. The president reaffirmed “multiple times” that he believes it may be easier to join the agreement now, the senator said.

Now the deal has been signed without the US it puts them in a much weaker negotiating position.