Does China want to see Trump at the helm of the United States for another four years? One leading financial analyst thinks so.
Nigel Green is the CEO of the deVere Group, a leading independent international financial consultancy. He now believes China’s long-term economic goals include President Trump getting elected to a second term.
China’s recent optimism about an agreement with America that includes a tariff roll-back is the basis for his argument.
“There has been an argument that in regard to the trade war, China was holding out, playing the long game and waiting for President Trump to leave office, before dealing with another administration. Whilst this argument might have held water before, I now believe this is not the case – and it is what is fueling recent developments in the trade war negotiations.”
If trade tensions between the U.S. and China were reduced, the IMF or International Monetary Fund would likely revise their global growth forecasts for 2020. Green thinks a rosier economic outlook is part of China’s plan to help Trump’s reelection chances.
“It is likely that China is currently fueling hopes to reach a phased agreement in the trade dispute with the U.S. and cancel tariffs as soon as possible because it will help President Trump’s re-election.”
Green also believes that the Chinese would prefer the 2020 race to end with a President Trump rather than a President Warren because dealing with Trump “will probably be easier than with some others.” He says:
“Ms. Warren can be expected to be even tougher with China than Trump, and not only on trade, but on other difficult issues, including climate change and human and labor rights.”
Of course, it is far too early to know if Elizabeth Warren will be the Democratic nominee. She is surging in the polls but there are multiple contenders with serious chances of winning.
Green also points out that Trump’s handling of the office has been “strategically helpful” and left room for China to gain global prominence. The “policies and rhetoric” of the current administration have been “helpful to China in achieving its longer-term goals.”
He goes further, adding:
“In many respects, President Trump has undermined Washinton’s global credibility, international governance bodies and key alliances, and has been indifferent if not antagonistic towards major trading agreements.
This all compromises America’s standing as the world’s primary superpower and it provides China with openings and opportunities it has previously never had in terms of global influence and setting international trade conventions.”
Stock markets have certainly responded positively to the trade talks between Washington and Beijing. Green says, “Investors’ exuberance will grow further still should the deal be cemented.”
However, Green ends with this warning:
“U.S. investors should perhaps also question whether Mr Trump’s administration has, in fact, handed China a great strategic opportunity that could damage America’s preeminent superpower status in the longer-term and, therefore, its economic dominance.”