NEWS FEED MONDAY: Why a Trade Deal with China Undercuts Democrats

J Robert Smith

  • Aug. 26, 2019
  • 2 min read

China signaled on Monday it was now seeking a “calm” end to its ongoing trade war with the U.S., as Asian markets crumbled and China’s currency plummeted to an 11-year low following the latest tariffs on $550 billion in Chinese goods announced last Friday by the Trump administration.

— Fox News, August 25 2019

QUICK TAKE

The trade war with China isn’t over until an agreement is signed. Then it has to be enforced. But if Xi Jinping is serious about cutting a deal with President Trump, then he’ll also cut the legs out from under Democrat presidential aspirants. Not that Xi cares about Democrats’ political fortunes. Not when Trump’s very effective tariffs and his threatened actions are walloping the Chinese in their wallets.

Democrats have recently discovered the American farmer. They see the China trade war as a wedge issue. Chinese retaliation against U.S. tariffs has focused on U.S. agriculture. Farmers and ag interests have suffered. But Democrats’ ag gambit may be short-lived.

This from CNBC in early August:

Yet farmers appear to be sticking by Trump — not just the Republican they largely supported in the 2016 election, but the trade warrior who has put their industries in China’s sights. And while they’re far from the largest group in Trump’s corner, farmers could prove to be a crucial voting bloc in the 2020 election.

Farmers are sticking with Trump because they’re playing a longer game. A smart trade deal with the Chinese protects their interests down the road.

If Trump can secure an agreement with Xi prior to the 2020 elections, then he’ll be better positioned for victory in Iowa, a critical farm state. He would also help his prospects in rural Wisconsin and Minnesota – both blue states – where ag interests are fundamental to those economies.

Not only ag interests, but other key sectors on the economy would benefit from a U.S.-China trade deal. Democrats can’t afford the president to have more good economic news.

The Democrats have tried to beat Trump with “Russia, Racism, and Recession.” All to no avail. They may find the China trade war no less useful to their election chances come November 2020.

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