Early this morning China transmitted and interesting tweet position that was/is a transparent display of their panda mask. In essence the panda play was a call for team USA to drop the zero-sum outlook and seek a win/win. Given the historic nature of Chinese negotiations the tweet was rather funny. However, it does highlight the dance.
Additionally, a few hours later President Trump tweeted about ongoing U.S-China trade discussions and something to watch for:
(Via Wall Street Journal) China agreed to reduce tariffs on U.S. autos to 15%, down from 40% currently, during a phone call with U.S. officials that opened the latest round of trade talks aimed at settling a trade dispute festering between the world’s two largest economic powers, according to a person familiar with the matter.
Chinese Vice Premier Liu He informed Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer of the move in a phone call late Monday, according to the person. It wasn’t clear when the change would take effect, but Washington is pushing Beijing to make concessions as soon as possible. (read more)
Here’s the precursor tweet from China. For those who are interested in following the dance, it is important to note this message was transmitted *after* the phone call between Premier Liu, Secretary Mnuchin and USTR Lighthizer.
Obviously those who follow standard negotiation tactics from China will note the transparent panda mask message behind this tweet. China doesn’t do win/win, they never have. Historically Beijing has no concept of win/win negotiations where each party gains a benefit; it is not part of their DNA strain to even fathom such an approach. For China the negotiation strategy is simple: if it doesn’t benefit China, it is not done. Period.
China requesting a win/win is simply the dragon putting on a cunning panda mask and messaging to enhance their position through the utility of their purchased Wall Street multinational allies inside the U.S. [People like CoC President Tom Donohue]
However, here’s where it gets really interesting….. and also how we can reconcile the 25 minute lead-off discussion from Chairman Xi at the G20 dinner in Buenos Aires.
President Donald Trump outmaneuvered Chairman Xi and the ruling Chinese communist party over North Korea. Through a well executed -and profoundly unorthodox- strategy, President Trump severed the influence of Beijing over Kim Jong-un.
President Trump did not confront Chairman Xi on this directly, instead he led China down a path where Trump controlled all the options. Now that the Korean relationship is moving toward reunification there is no way for China to put their influence back into play.
This was all done by President Trump smartly taking a unique approach and removing the Beijing influence.
President Trump then communicated directly with Kim Jong-un; and that meant no turning back. As a direct result China lost their primary geopolitical weapon against U.S. economic policy.
Many people saw what happened in North Korea; and most recognized Trump had established a paradigm shift in the trilateral relationship; however, few expanded their review of Trump’s DPRK strategy to contemplate: what he achieved was only one phase toward the president’s primary objective – a full and comprehensive U.S-China reset.
The geopolitical and economic confrontation with China is President Trump’s legacy initiative. This is his signature objective; everything else is less-than.
Chairman Xi has now witnessed the cunning strategy of his adversary. China can no longer underestimate the strategy. It is critical to understand how incredibly out-played China was over the North Korean issue. President Trump neutered decades of Chinese duplicity. Chairman Xi, and by extension, communist China, was outmatched.
Simultaneously, Chairman Xi got a taste of his own medicine. In the DPRK contest President Trump mirrored the panda mask approach. Trump praised Xi to a level that his approach was routinely criticized by U.S. media as over indulgent; but that criticism didn’t matter – it actually played directly into Trump’s strategy.
Chairman Xi could not initially fathom an opponent that would use criticism as a weapon and allow the appearance of domestic weakness as an international strategy. Beijing was caught off guard, and Xi allowed his perspective of Trump to be clouded by historic standards therein. Additionally, Chairman Xi watched as POTUS initiated trade conflicts with his own allies over steel, aluminum, soft-wood lumber, and even washing machines.
As Xi looked out his window, surely Trump was bluffing against South Korea, Japan, the EU (writ large), Canada and Mexico…. but Trump doesn’t bluff. If Trump was willing to walk through the firestorm of western allied criticism (over his trade policy) what would this same person do in trade conflict against a geopolitical foe?
Trump walked away from TPP. Trump walked away from the Paris Treaty. Trump walked away from the G7 communique in Canada. Trump walked away from the G20 climate communique in Buenos Aires. Hell, Trump withstood the firestorm of criticism over Kashoggi and leveraged Saudi Arabia into increased OPEC oil production which hurts all of China’s strategic allies (Russia, Iran, Venezuela etc).
How do you think Chairman Xi reflected upon the mounting demands from an economic adversary (Trump) knowing what Xi was witnessing from this independent Trump toward his own economic allies? See the scale of shifting perspective?
Not only is this U.S. president willing to go to the trade mattresses, he was willing to go to these damned mattresses while simultaneously executing a DPRK strategy that removed the primary arrow from Panda’s quiver.
Chairman Xi, and his economic council of advisors writ large, have to accept that President Trump -through his eagle talon action- actually wants the conflict with China, while he simultaneously praises them in public.
Hundreds of years worth of China’s well-honed cunning negotiation strategy is being used against them.
Do they feel rucky?