The future for President Trump and America rests with China trade war

The future for President Trump and America rests with China trade war
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For any president seeking reelection, the health of the economy is always one of the most important indicators for their electoral prospects. But for President TrumpDonald John TrumpMarine unit in Florida reportedly pushing to hold annual ball at Trump property Giuliani clashes with CNN's Cuomo, calls him a 'sellout' and the 'enemy' Giuliani says 'of course' he asked Ukraine to look into Biden seconds after denying it MORE, the current global uncertainty weighs even heavier. Investors around the world are seeking safety, roiling the markets as bond yield inversions presage recession. Economic headwinds range from a slowing European economy to geopolitical risks, but nothing weighs on the global economy more than the uncertainty of trade tensions.

With hawkish rhetoric between Washington and Beijing, the White House now finds itself in a bind. In baseball, it is often said that a manager is never as good as he looks when his team is winning and vice versa. The same can be said for presidents and the economy. But when it comes to uncertainty about trade tensions, the buck stops with President Trump.

When embarking upon its trade war with China, the administration rightly tackled many of the most egregious and unfair economic policies of Beijing. For too long, China has taken advantage of foreign companies seeking access to its markets, stole intellectual property, and harnessed this to build its own national champions in key industries. However, while the White House has been correct in identifying the issues where Chinese policies must change, the execution of its approach is starting to backfire.

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As President Trump headed to the Group of Seven summit in France over the weekend, it was clear that the major industrialized democracies of the world, which all share concerns about Chinese economic and trade policies, are riven by disagreements. President Trump has been equally disruptive in bilateral trade relationships with key American allies and, rather than concentrating efforts on China, the major economies of the West are facing their own trade tensions lurking in the background.

At the same time, from the board rooms of multinationals to the kitchen tables of farm families, these trade tensions are disrupting supply chains, investment, and sales with no end in sight. Even if American importers and exporters were to adjust their overseas markets, finding alternatives to China is difficult if not impossible. While President Xi Jinping has to navigate these same tensions and uncertainties, he does not worry about reelection. But when President Trump announced that tariff hikes would be delayed so as not to impact Christmas holiday shopping, it became clear just how much political pain his administration is willing to endure.

It also became clear that it is American consumers who are ultimately bearing most of the costs of these tariffs, on top of the economic pain already felt by American farmers and manufacturers. Blaming the Federal Reserve, dangling payroll tax cuts, or ordering American companies to find alternatives to China is not going to address this. With Beijing in no mood to make concessions, “victory” in this trade war will not come any time soon, and the economic impact will echo in our political debate.

Globalization and the interlinkages between the world economies have changed the dynamics of economic competition, as diverging interests and values presage more confrontation between the United States and China. In this dynamic, Beijing has the upper hand if President Trump is solely focused on “out confronting” China instead of “out competing” it.

Trade is a vital aspect of this competition, but it is not all of it. It requires an emphasis on ensuring that all the strengths of bold innovation and dynamism are bolstered by policies that also advance education and infrastructure. Our allies and partners are needed to provide alternatives to Chinese markets, as well as to present a common front to ensure that open societies rather than authoritarians lead in critical technologies such as artificial intelligence, quantum computing, and 5G networks.

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The relationship between the United States and China will define the 21st century, and it is vital that our leaders position us to meet this challenge. For President Trump and his eventual 2020 opponent, any debate about the economic performance of his administration, and about alternative Democratic policies, cannot be decoupled from how the United States addresses China. While Beijing may very well hope that it can wait until the election next year to see if the American approach will change, no occupant of the White House can return to “business as usual.”

Doing so would be the ceding of American leadership on the world stage. Having embarked on this trade war, the reelection prospects of President Trump hang on its outcome, even if it means justifying why pain in the near term is needed to address Chinese behavior. Whipsaw policies and ambiguous statements about “second thoughts” signal confusion rather than strength. For candidates seeking the Democratic nomination, it is important to continue to hold China to account, even as they seek to differentiate their economic policies from those of President Trump.

The current approach is showing economic and political unsustainability. The debate about our economy will hinge on the strategic vision of our leaders for the relationship between the United States and China.

Dan Mahaffee is the senior vice president and director of policy at the Center for the Study of the Presidency and Congress in Washington.