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6 | WEDNESDAY, AUGUST 28, 2019 THE NEW YORK TIMES INTERNATIONAL EDITIONbusiness
Chinese goods. He declared that China’s
president, Xi Jinping, whom he had pre-
viously called a “good man,” was an “en-
emy.” And he commanded American
companies to abandon China and start
making their products in the United
States.
That last bit was especially striking,
given that successive American admin-
istrations have criticized Chinese coun-
terparts for using state-owned compa-
nies as tools of policy in contravention of
market forces. Now, here was the presi-
dent of the United States, traditional
champion of swashbuckling capitalism,
ordering American companies to heed
his dictates.
In markets around the globe, invest-
ors reacted to these developments as
powerful signals to yank their money to
safety. They sold stocks and bought
bonds. They dumped a vast assortment
of currencies and purchased the Ameri-
can dollar, the ultimate haven in mo-
ments of worry.
They reacted, in short, as if much of
the globe suddenly appeared riskier.
Signs of trouble had already been
mounting. For better or worse, the
United States and China have been
fused for two decades, with their for-
tunes influencing economic conditions
everywhere.
China has invested aggressively in
manufacturing plants, ports and power
systems to become the factory to the
world. American consumers are the
most significant drivers of global eco-
nomic growth. Together, the United
States and China are responsible for
about 40 percent of the world’s eco-
nomic output.
Any sign of a breakdown in this ar-
rangement — the threat that China will
be impeded in selling its goods or that
the American appetite is waning —
spreads worry far and wide.
The trade war that has escalated over
the past year has already produced dis-
tress. Germany, the largest economy in
Europe, is teetering toward recession, in
large part because of weakening ex-
ports. As China’s economy slows in the
face of American tariffs, Chinese fac-
tories have less need for goods made in
Germany, whether machinery or petro-
chemicals.
German weakness has contributed to
a general sense of malaise in Europe,
just as the Continent grapples with the
prospect that Britain — also contracting
— might crash out of the European Un-
ion without a deal governing future com-
mercial relations.
Across Asia, the drop in trade has
sown trouble, with Singapore and Hong
Kong now declining and South Korea
slowing. Even Vietnam — a country that
has received fresh investment as multi-
national companies have sought alter-
natives to making their wares in China
— looks vulnerable if global trade con-
tinues to diminish.
As far away as Brazil and Argentina,
the effects of a slower-growing China
are being felt by soybean farmers who
ship their harvest to Chinese ports to
feed livestock.
“For the rest of the world, there are
many other countries that are innocent
bystanders that will actually suffer even
more than the United States and China,”
said Louis Kuijs, the Hong Kong-based
head of Asia economics at Oxford Eco-
nomics. “There is not going to be any de-
escalation any time soon.”
The United States is still growing,
with the unemployment rate lower than
it has been in half a century. But compa-
nies are deferring investments as they
puzzle over the effects of trade hostil-
ities. How can executives proceed withexpanding operations in Ohio or Michi-
gan when they have no certainty over
the tariffs that will apply to parts and
electronics brought in from China? A
slowdown in investment could eventu-
ally prompt households to curb their
spending, bringing a recession.
If a continued trade war footing tanks
stock markets, share prices could them-
selves become an affliction. As millions
of Americans absorb the reality that
their investments are worth less, they
may question whether to buy that newhome, take that trip or open that new
business.
Long before Mr. Trump took office,
American governments complained
about China and its failed promises to
open its market. China has lavished sub-
sidies on state-owned companies. It
turned itself into an export juggernaut
while ignoring labor and environmental
standards.
Beijing and Washington have argued
over this state of affairs for decades,
while American labor interests and in-dustry groups have demanded redress.
But Mr. Trump has gone much further
than his predecessors in his diagnosis.
In his telling — at least, in his combative
moments — China is a rogue operator
that fleeces Americans. The solution is
not another slow-moving case at the
World Trade Organization, but a funda-
mental redrawing of commercial geog-
raphy.
American companies must vacate
China, walking away from customers
and supply chains. In his view, theAmerican economy is supposed to “de-
couple” from China, as the think tank
vernacular has it.
Mr. Trump’s tweet storm on Friday
morning appeared to underscore that he
was serious, that he was truly willing to
see Americans accept the costs —
plunging stock markets, weakening in-
vestment — for a wholly new sort of re-
lationship with China as adversary.
Stock markets underwent a sell-off
because a dissolution of American and
Chinese commercial arrangements
would certainly be disruptive. Compa-
nies with global operations would have
to scramble to figure out where they
would buy parts and raw materials. The
potential outcomes were many, but none
of them involved the world’s getting
richer.
Yet by Sunday morning, at the Group
of 7 summit in France, Mr. Trump was
expressing “second thoughts” about the
new tariffs on Chinese goods. By Mon-
day morning, he was calling Mr. Xi a
“great leader” and reporting that China
was interested in resuming trade talks.
Stock markets were buoyant.
At least for a few hours, the bewilder-
ing notion that the United States and
China were dissolving ties could be for-
gotten.
But for how long? And what is the end
game?
For as long as Mr. Trump has occu-
pied the Oval Office, trade experts have
parsed his often contradictory words
and actions for clues to his real policy
aims and beliefs. They have labored to
divine what he values and somehow to
separate it from what he may say as a
negotiating ploy or as a diversion from
scandal.
Most have come to conclude that his
policy is perpetually flexible, depending
on which advisers have his ear and on
the tenor of television conversations
about American economic growth
prospects and — especially — the stock
market.
His hard-line advisers — like the
United States trade representative,
Robert Lighthizer, and Mr. Trump’s chief
trade adviser, Peter Navarro, author of a
book called “Death by China” — urge
him to untether the American economy
from China.
The president’s national security ad-
viser, John R. Bolton, portrays trade as
but one element in which China poses
grave peril to American interests. In this
calculus, economic damage is the un-
avoidable cost of reclaiming American
status as a superpower that dictates the
terms of world engagement.
But Larry Kudlow, the former televi-
sion host who leads Mr. Trump’s Na-
tional Economic Council, and Treasury
Secretary Steven Mnuchin tend to focus
on areas of interest to investors, not
least share prices.
Mr. Trump is adept at maintaining po-
sitions that seem mutually exclusive. In
recent weeks, he has touted the awe-
some strength of the American econ-
omy while accusing the Federal Reserve
chair of imperiling the economy by not
aggressively lowering interest rates. He
has flirted with tax breaks to juice the
economy further.
But the trade war threatens to force
Mr. Trump to choose between it and eco-
nomic growth.
In Beijing and Washington alike,
hard-liners have dug in, shrinking room
for a compromise. In both capitals, a
sense of permanent alteration has tran-
spired, a deepening assumption that —
whatever comes next — China and the
United States will proceed with pro-
found wariness.
For the global economy, that could en-
tail grave uncertainties and perils.Stark choice in China dispute
T RADE, FROM PAGE 1Uncertainty has caused companies like Gradall Industries, which makes industrial equipment in Ohio, to postpone investments.ROSS MANTLE FOR THE NEW YORK TIMESThe end of a shift at a Ford factory in Chongqing, China. Last week, Mr. Trump ordered American companies to leave China.GILLES SABRIÉ FOR THE NEW YORK TIMESoff-putting and counterproductive.
“There can be virtue in playing your
cards close to your chest and in keeping
adversaries guessing, but the problem
with the Trump model is that he takes
those tactics to an extreme,” said Mi-
chael Doran, a senior fellow at the con-
servative Hudson Institute. “You never
know when to believe him.”
Mr. Doran and others attribute that to
Mr. Trump’s history in real estate, when
negotiations could be full of bluff or in-
timidation without much consequence
beyond the immediate players.
“When you are a solo operator negoti-
ating real estate deals, all that matters
in the end is the contract — the signa-
ture on the deal,” Mr. Doran said. “In
politics and diplomacy, there is much
that is important that is never in the for-
mal deal.”
Credibility, among others. Mr. Trump,
who in business sometimes impersonat-
ed a spokesman for himself, has a way of
putting words in the mouths of other
leaders in a way that serves his interests
and that happen to sound more like him
than them.
“The question I was asked most today
by fellow World Leaders, who think the
USA is doing so well and is stronger than
ever before, happens to be, ‘Mr. Presi-
dent, why does the American media
hate your Country so much? Why are
they rooting for it to fail?’ ” he wrote on
Twitter on Sunday.
No leader expressed anything like
that in public, although it would be im-
possible to know for sure what was said
in private. Mr. Trump likewise insisted
that some of the leaders secretly agreed
with him behind the scenes that Russia
should be welcomed back into the Group
of 7, despite their public comments say-
ing the opposite.
At one point on Monday, the president
went so far as to mischaracterize his
own wife’s involvement in his diplo-
macy. “The first lady has gotten to knowKim Jong-un and I think she’d agree
with me, he is a man with a country that
has tremendous potential,” he said, re-
ferring to North Korea’s leader.
But Melania Trump has never met Mr.
Kim, much less gotten to know him.
Within a few hours, the White House
press secretary, Stephanie Grisham,
had to release a “clarification” acknowl-
edging that. “While the first lady hasn’t
met him,” she said, “the president feels
like she’s gotten to know him too.”
Never burdened with excess devotion
to precision, Mr. Trump has a way of just
saying whatever comes into his head. At
one point on Monday, he said offhand-
edly that he might release his Middle
East peace proposal before Israel’s elec-
tion next month, completely contrary to
the White House plan.
He switched positions on new tax cuts
and enhanced background checks for
gun purchases. He denied that a
planned trip to Denmark was to pursue
his ambition of buying Greenland, then
when the prime minister said it was not
for sale, he canceled the trip, saying
there was no point in going.
That can leave even his supporters
unsure how to respond. When Moham-
mad Javad Zarif, Iran’s foreign minister,
made a surprise visit to Biarritz on Sun-
day for discussions with the French on
the sidelines of the Group of 7 meeting,
American officials would not say
whether they had advance notice. “No
comment,” Mr. Trump said, uncharac-
teristically.
That led many to assume he had been
ambushed and his allies lashed out on
his behalf.
Nikki Haley, Mr. Trump’s former am-
bassador to the United Nations, called it
“completely disrespectful” and “manip-
ulative of Macron,” referring to Presi-
dent Emmanuel Macron of France. Sen-
ator John Cornyn, Republican of Texas,
added, “Why would Macron suck up to
stone cold killers?”
But then a day later, Trump insisted
that no, he had not been ambushed, he
had known all along and given it his
blessing. In fact, he went even further,
declaring himself willing to meet with
President Hassan Rouhani of Iran in the
next few weeks if Mr. Macron could set
up an encounter under the right circum-
stances.
In part, Mr. Trump’s various contra-
dictions owe to the fact that he is far
more open and far less guarded with the
news media than any of his modern
predecessors. For all of his antipathy to-
ward “fake news,” he talks with report-
ers almost constantly, creating many
opportunities for off-script remarks. On
Monday alone, he took questions from
reporters in free-flowing sessions four
different times.
Journalists never complain but even
Mr. Trump seemed to think maybe he
had talked too much. “I don’t know why
we need to have a press conference,” he
was overheard griping to Mick Mul-
vaney, his acting chief of staff, before his
last encounter with journalists.
“You wear them down after a while,”
Mr. Mulvaney replied.Swerving
on trade
leaves world
off balance
T RUMP, FROM PAGE 5Never burdened with excess
devotion to precision, Mr.
Trump has a way of just saying
whatever comes into his head.About two-thirds of those buying one
of the new S.U.V.s, called the XT5, have
never owned Cadillacs before, G.M.
said. That suggests that the vehicles are
broadening Cadillac’s appeal.
Mr. Carlisle said G.M. also now had a
winning identity that it is trying to in-
fuse Cadillac with. In a previous turn-
around push, Cadillac tried to be an
American version of BMW.
“We’re not trying to out-German the
Germans anymore,” he said. “We have
to find our own audience. When Cadillac
has done its best, it is when we have rep-
resented the best of technology and in-
novation.”
One part of the plan is for Cadillac to
add electric vehicles to compete with
Tesla, which in just a few years has be-
come one of the leading sellers of up-
scale cars. A sedan coming next year
will have a digital backbone to allow
G.M. to send some over-the-air software
updates to the car, a feature that Tesla
pioneered and has made a hallmark of
its cars.
As Mr. Carlisle’s CT6 neared an inter-
change, he placed his hands back on the
steering wheel and took back control of
the car from Super Cruise. The system is
not yet capable of navigating from one
highway to another, but Mr. Carlisle said
that feature will be added at some point.
The system has the potential to set
Cadillac apart from other luxury brands,
even Tesla. Competing systems require
drivers to keep their hands on the steer-
ing wheel, which almost defeats the pur-
pose of having the car steer itself. None
have the infrared camera to ensure that
drivers keep their eyes on the road and
can’t give in to the temptation to gaze attheir phones or anything else. While
Tesla drivers are supposed to keep their
hands on the steering wheel while using
the company’s Autopilot technology,
that system can continue hands-free op-
erating for one or several minutes, de-
pending on the driving conditions. Tesla
acknowledges that Autopilot can have
trouble detecting stationary objects like
stopped or parked cars or highway bar-
riers, and three crashes resulting in fa-
talities have occurred when Autopilot
was engaged but failed to detect obsta-
cles in the road.
The Center for Auto Safety, a nonprof-it consumer advocacy group that tracks
traffic accidents, said it was unaware of
any crashes involving Super Cruise in
the two years it has been on the market.
As we headed back to Detroit in the
CT6, Super Cruise alerted Mr. Carlisle to
take control of the car on a stretch of
I-94. Drawing on data from digital maps,
the system knew that the car was about
to enter a construction zone, a confusing
driving environment where a human
should be in control. By the time orange
barrels appeared along the side of the
highway, Mr. Carlisle had his hands back
in the 10-and-2 position.
Super Cruise “is the only system on
the market that will tell you ahead of
time that you have to take over,” said
Jake Fisher, director of auto testing at
Consumer Reports, which evaluated avariety of driver assistance systems last
fall and scored Super Cruise above all
others.
The potential of Super Cruise and fu-
ture electric vehicles to reinvigorate
Cadillac could be offset by long lead
times that leave the strategy vulnerable
to changes in the economy and con-
sumer tastes, as well as competitors’
own initiatives. Cadillac’s first electric
model, an S.U.V., won’t arrive for three
years. By then, the market is likely to be
crowded. Jaguar and Audi have just in-
troduced their own electric S.U.V.s, and
others are coming next year from Mer-
cedes, BMW and Porsche.
“They have to establish what Cadillac
stands for quickly,” said Erik Gordon, a
business professor at the University of
Michigan who follows the auto industry.
“Otherwise, they’re still going to be
looking at declining sales.”
And despite all the accolades Super
Cruise has garnered, G.M. is doing little
to take advantage of the technology. It is
available only on the slow-selling CT6,
as part of an options package that
pushes the price to $78,000. The car’s
sales have fallen 60 percent this year,
and G.M. is considering halting produc-
tion in January. The system will become
available in a smaller sedan next year,
the CT5. But S.U.V. models won’t get Su-
per Cruise for another two years or so.
That means the brand’s signature tech-
nology won’t be on its most popular
models for some time.
“That’s just one of these unfortunate
prioritization dilemmas,” Mr. Carlisle
said, again sitting back, hands free,
while Super Cruise piloted us down I-94.
“Had we thought of it a little earlier, we
would have gotten to it sooner.”Against tough odds, Cadillac aims for revival
C ADILLAC, FROM PAGE 5A Cadillac CT6 in downtown Detroit. The Super Cruise driver-assistance system is
available as part of an options package that pushes the model’s price to $78,000.NICK HAGEN FOR THE NEW YORK TIMES“We’re not trying to
out-German the Germans
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