◼ECONOMICS BloombergBusinessweek November 18, 2019TRADE WAR CABINET
● ROBERT
LIGHTHIZER
The Reagan
administra-
tion alumnus
is Trump’s
trade czar and leads
negotiations with China.
● LARRY KUDLOW
The former
CNBC host
Trump draft-
ed to lead
his National Economic
Council is the adminis-
tration’s most prominent
free trader.
● PETER NAVARRO
Trump’s
special
adviser on
trade is an
avowed China hawk.
● STEVEN MNUCHIN
The ex-
Goldman
Sachs chief
information
officer heads Treasury
and co-leads the
China talks.thinktheiraccomplishmentsaregoingtofall way
short.Andtheywon’tbethefirstadministration to
dothat.Butwow,theycertainlyraisedthestakes
and certainly allowed U.S. interests to suffer through
the tariffs in this effort.”○ OVAL OFFICE SCUFFLES
The picture that emerges from dozens of interviews
over the past year with officials and other people
close to negotiations is one in which one man’s
impetuousness has confounded attempts at strat-
egy. It’s the story of a president caught between his
instincts as a dealmaker, his place in history, and
a contentious band of aides, some of whom goad
him into more radical action and others who tease
him into restraint.
“That’s very Nixonian!” intoned Larry Kudlow,
the head of the National Economic Council, as the
president and his aides huddled in the Oval Office in
August to debate an intervention to weaken the dol-
lar. The strong greenback is an obsession for Trump,
who believes it undermines his tariffs. Three months
on, the invocation has different connotations as
Trump faces possible impeachment. But back then
it was a code between two seventysomething men
for avoiding an economic mistake—an allusion to
Richard Nixon’s August 1971 decision to end the dol-
lar’s convertibility to gold. That move led to years of
turmoil in markets and the stagflation of the 1970s.
Well into September, Trump said he would
never settle for a partial deal with China; it had
to be the grand slam. Yet behind the scenes, his33● END
Xi Jinping, appear intent on reaching at least a par-
tial truce by mid-December. In a Nov. 12 speech,
Trump again signaled he would refrain from a new
tariff assault if Beijing agrees to a “phase one” deal
that hinges largely on it stepping up U.S. agricul-
tural purchases to as much as $50 billion within
two years, more than twice the level before the
conflict, and curtailing intellectual-property theft.
Trump sees it as the start of a more comprehen-
sive agreement. But Chinese officials quietly say
they see any future successful phases as unlikely
and that commodity purchases will at first simply
be at the level they were before the Trump tariffs.
Skeptics in the Trump administration also question
whether Beijing is willing to close a larger transfor-
mative deal with a president running for reelection
amid a slowing economy.
Politicians and businesses across the board agree
Trump was right to take on China. At the same time,
the issues being tackled in a first phase of the trade
deal are much narrower than the ambitious goals the
White House once set for itself. There’s little doubt
the fight will have a place in history, says Douglas
Irwin, an economic historian at Dartmouth: No
American president in the past century has waged
an economic war on this scale. But while Trump cre-
ated an opportunity, he risks squandering it as well.
“Are we going to look back and say, ‘This was all
a failure’? I don’t think so,” says Wendy Cutler, a for-
mer U.S. trade negotiator who leads the Asia Society
Policy Institute. “But if we end up comparing what
LIGHTHIZER, KUDLOW: EVAN VUCCI/AP PHOTO (2). NAVARRO: ALEX BRANDON/AP PHOTO. MNUCHIN: ERIN SCOTT/REUTERS.they’re able to accomplish vs. their initial objectives,