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Trump Inserts His Negotiating Strategy Into U.S.-China Trade War


How likely is a trade deal with China? Is one more likely after the topsy-turvy last few days of the G-7 summit in France? President Trump talked positively about trade talks yesterday, which seems to have calmed financial markets for the moment.


PRESIDENT DONALD TRUMP: We were called - and we're going to start very shortly - to negotiate. We'll see what happens. But I think we're going to make a deal.

KING: Now, that was a turnaround from a few days before, when President Trump tweeted that he hereby ordered American companies to immediately start looking for alternatives to operating in China, including the alternative of bringing U.S. companies back to the United States. So to give us a sense of the administration's strategy, we're joined by Michael Pillsbury. He's senior fellow and director of China Strategy at the Hudson Institute, and he's also an informal adviser to President Trump. Good morning, sir.


KING: So what is the president's strategy here?

PILLSBURY: Well, the president's strategy - he's kind of telegraphed himself when he said that, "this is how I negotiate, and it's worked very well for me," unquote. You'll find in "Art Of The Deal" and several other of his 14 books he's co-authored that he takes negotiations as a process very seriously. He sees an opening. He sees the application of pressure and exchanging of offers in the middle. Then he sees the endgame, where the final terms are agreed to, and the lawyers get into it and make it binding.

KING: Here's the thing, though. Markets and companies get jittery when the president tweets things like U.S. businesses should make alternate plans to working in China. Now, that may throw China off. That may make China nervous. But it also makes U.S. firms nervous. We saw what happened to the markets. Is it really worth it?

PILLSBURY: Well, I think it depends on your understanding of China and just how much China has been, to use the president's word, ripping off the United States. If your view of China, which many people still have - I call it the obsolete view, the old-fashioned view. People of my generation have it, sort of, like, 80% - is that China's basically a friend, it's on its way to becoming a democracy. They basically want a free market. What's not to be happy about? And yes, there's a little bit of, you know, cheating, but it's probably by individual companies. No big deal.

If you have that view of China then, of course, you're in a panic, if you're an investor or a CEO of a major corporation involved in China. That's not...

KING: Or if you've got a 401(k) and you're watching what the markets are doing, right? That's a lot of people.

PILLSBURY: Or if you're a farmer in Iowa. Or a farmer in Minnesota. So that group's important. What the president is saying - and I think Nancy Pelosi, and Chuck Schumer and quite a few others on the Democratic side support him in this. They're saying that we now see a very different China than we thought. This is a different China, which seems to be focused on stealing our most innovative technology, with a purpose not of sort of raising the living standards of a peasant in Sichuan but guaranteeing global primacy for China, first in economics and then in every other possible way, and surpassing the United States, setting up a different kind of world order in which democracy will give way to surveillance and authoritarian regime.

This China looks much more dangerous. And so the need for a binding agreement with them to rein in as much of this misconduct as possible, this China looks like it really needs a trade deal from us that can be enforced.

KING: But can the U.S. government really...

PILLSBURY: In fact, in early May, as you know, we almost had that. Many people in the administration said we're 90% of the way there. So to be optimistic, which is what I am, this trade deal was almost in hand. Then for various, complex reasons on the Chinese side, they reneged on the most important parts of it, the legally binding part that allows either tariffs to be put back on or lawsuits to be filed inside China. The serious part of the agreement, in other words. So that's where we are now, trying to close the deal. It's what President Trump's book, "The Art Of The Deal," talks about, is the endgame.

KING: Yes. But what if China - just quickly, in the last 30 seconds we have left - what if China is playing the long game, just waiting for President Trump to no longer be president?

PILLSBURY: Well, they are playing the long game. That's the whole point. And I think it's the bipartisan support from Nancy Pelosi and Chuck Schumer, in particular, that gives us a really good chance of getting the deal. The president's not alone on this. A lot of people see this new, dangerous China that I've written about in the book "The Hundred-Year Marathon." The problem is, however, there are superhawks who say, let's not negotiate at all, this country is just untrustworthy. That's a small group, but it's growing in some parts of our country.

KING: Michael Pillsbury, author of "The Hundred-Year Marathon: China's Secret Strategy To Replace America As A Global Superpower." He's also an informal adviser to President Trump. Thank you, sir.

PILLSBURY: And an optimist about getting a good deal.

KING: All (laughter) right. Take care.

PILLSBURY: Thanks. * Transcript provided by NPR, Copyright NPR.