China and the World

Making it personal

An insider account of Trump’s stance on China, trade and Xi Jinping

Bob-Woodward-w

Bob Woodward’s fly-on-the-wall book has angered Trump and his team

Fans of the Netflix show Ozark will be familiar with the Missouri terrain in which the money- laundering drama is set. What they may not realise is that the American military considers the topography of the Ozarks similar to North Korea. In one of many revelations in Bob Woodward’s new book about the Trump administration, titled Fear, the author points out that the US air force ran an elaborate series of simulated air strikes in the Missouri Ozarks last October, trial running an operation to bomb Kim Jong-un’s nuclear weapons sites.

North Korea and China feature prominently in Woodward’s book. Among the more surprising passages for policymakers in Beijing is that they aren’t the only people to dislike the THAAD missile defence system installed in South Korea (see WiC357). President Donald Trump didn’t want it either.

In fact, Trump went wild when he heard that the US had paid for the missile shield and didn’t calm down when his (then) National Security Advisor HR McMaster told him it was a decent deal because South Korea gave the Americans the land for free on a 99-year lease.

Trump – already annoyed at the $18 billion trade deficit with Seoul – asked for a map to see where the THAAD system was located.

Some of the land was a former golf course, which shaped his view of the deal as a real estate transaction. “This is a piece of shit land,” said the former golf course developer. “This is a terrible deal. Who negotiated this deal? What genius? Take it [the THAAD] out. I don’t want the land.”

Another outburst from Trump at a National Security Council meeting in mid-January will have interested the Chinese too. According to Woodward’s sources: “Trump got right to his point. ‘What do we get by maintaining a massive military presence in the Korean Peninsula,’ he asked, returning to his obsession with money and the troops. ‘And even more than that,’ he went on, ‘what do we get from protecting Taiwan, say?’”

What emerges from Woodward’s account is that one of Trump’s closest counsellors is Lindsey Graham, a Republican senator. Graham is the person who persuades Trump that North Korea should be top of his national security agenda. At a White House dinner with Trump and John McCain last spring, McCain was asked about a nuclear strike on Pyongyang to which the Arizona senator replied that Kim could then orchestrate a million deaths in Seoul with his conventional weapons.

“If a million people are going to die, they’re going to die over there, not here,” Graham tells Trump.

To this Trump responds, “That’s pretty cold” but he then pivots into dealmaking mode: “He said he believed China loved him and that it gave him great leverage,” the account concludes.

That wasn’t the only dramatic proposal on North Korea that Graham made to the Trump team. Last September the South Carolina senator (and retired colonel in the air force reserve) was invited to the White House, where he told chief of staff John Kelly that Kim Jong-un should be assassinated, but not by the US.

“‘China needs to kill him and replace him with a North Korean general they control,’ Graham said. China had at least enough control so the North would not attack. ‘I think the Chinese are clearly the key here and they need to take him out. Not us, them. And control the nuclear inventory there. And wind this thing down. Or control him. To stop the march to a big nuclear arsenal. My fear is that he will sell it.’”

Woodward also makes plain that Trump puts huge faith in the bond he feels he has forged with Chinese leader Xi Jinping.

For instance, Trump is very pleased when during dinner at his Mar-a-Lago resort in Florida Xi voices support for US missile strikes on Bashar-al Assad’s Syrian base.

Informed over dessert that the missiles have been launched to punish a chemical weapons attack, Xi merely asks Trump how many warheads have been fired. After being told 59, he responds: “Okay, I understand. Good, he deserved it.”

Woodward writes that Trump often waxes lyrical about the Xi relationship with those around him.

“In foreign affairs, it was about personal relationships, Trump explained to those who spent the most time in the Oval Office. ‘I have really good relations with Xi,’ he said of the Chinese president. ‘We have really good chemistry. Xi likes me. Xi rolled out the red carpet when I visited Beijing.’”

But Woodward also explains how the president’s advisors try to temper Trump’s delight in his relationship with his Chinese counterpart.

“McMaster tried to explain that Xi was using the president. China was an economic aggressor, planning to become Number One in the world”, Woodward writes. “Trump said he understood all of that. But all of those problems were superseded by his rapport with Xi.”

The president also points to a key proof of the value of the relationship with Xi, book recounts.

“In the last four months of 2017, the United Nations Security Council had voted three times to impose stiffer economic sanctions on North Korea. On December 22, the vote was 15 to 0, including China. The sanctions were to cut the amount of petroleum that could be imported into North Korea by 89%. Trump was quite pleased. ‘That’s because I developed such a great relationship with President Xi,’ he said. ‘And because he respects me and I respect him. And isn’t it good that I’m friendly when all you guys say that we should be adversarial with them. Because if I didn’t have that great relationship with President Xi, they never would have done that.’”

Of course, Trump’s emphasis on his stellar bond with Xi sits uncomfortably with Sino-US trade tensions, which have ratcheted up since March, when tariffs were imposed on imports of Chinese steel and aluminium.

This Monday Trump followed up with fresh tariffs on $200 billion of Chinese goods (initially at a 10% rate), having imposed 25% tariffs on $50 billion of Chinese imports in May. On Tuesday he responded to retaliatory action from the Chinese (on $60 billion of US goods) by saying that he would slap tariffs on the remaining $267 billion of imports America gets from China.

“We don’t want to do it, but we probably will – we’ll have no choice,” he warned. Woodward’s book makes clear that Trump may well carry out the threat. Conversations about trade are another dominant theme in Fear which makes plain one of Trump’s (few) ideological anchors is his unshakeable belief that if you have a trade deficit with a country, you are losing to that country.

When former economic tsar Gary Cohn tries to explain that US GDP is 84% services-related and that trade deficits helped the economy to grow – because cheaper imported goods left Americans with more disposable income to spend on local services – Trump replied: “I don’t want to hear that. It’s all bullshit.”

Concrete examples didn’t seem to work either.

“In another discussion with the president, Cohn unveiled a Commerce Department study showing the US absolutely needed to trade with China. ‘If you’re the Chinese and you want to really just destroy us, just stop sending us antibiotics. You know we don’t really produce antibiotics in the United States?’” Cohn tells Trump.

Cohn goes on to show that China sold almost all the antibiotics available in the US market and that there was no local production of essential drugs like penicillin.

“‘Sir, so when mothers’ babies are dying of strep throat, what are you going to say to them?’ Cohn asked Trump if would tell them ‘Trade deficits matter.’”

Trump then suggests that America buy the drugs from another country. “‘So now the Chinese are going to sell it [antibiotics] to the Germans, and the Germans are going to mark it up and sell it to us. So our trade deficit will go down with the Chinese, but up with the Germans,’” Cohn responds.

Peter Navarro, a White House trade advisor, then interjects that they can buy the goods through some country other than Germany.

“‘Same problem,’ Cohn said. ‘You’re just rearranging deck chairs on the Titanic.’”

Trump proves immune to all Cohn’s economics tutorials. “The Groundhog-Day-like meetings on trade continued and the acrimony only grew,” writes Woodward, with an exasperated Cohn eventually asking the president why he holds such beliefs. “‘I just do,’ Trump replied. ‘I’ve had these views for 30 years.’”

“One cause of the problem was the president’s fervent belief that annual trade deficits of about $500 billion harmed the US economy. He was on a crusade to impose tariffs,” Woodward suggests.

Another of the vignettes in the book is revealing of Trump’s psychological approach to negotiating with the Chinese – i.e. play hardball and then rely on the relationship with Xi to strike an amenable deal.

Woodward describes how Trump instructs Tom Bossert, an advisor on homeland security, on what to say during an upcoming TV interview (doing so while also watching coverage of the US Masters golf tournament).

“‘First you tell them, Trump’s dead serious.’ That’s what you tell them. Are you ready? Trump’s hands and fingers went up again. ‘You tell them $150 billion. Wait! You tell them $150 billion is nothing. He’s ready to go to $500 billion because he’s tired of not being treated fairly. That’s what you tell them!’ Trump continued with animated fingers. You ready? That’s what you tell them.’”

“Okay, Bossert said, ‘you want me to go hard? ‘You go hard!’ Trump said with enthusiasm. ‘If it weren’t Sunday, you’d shut the markets down, that’s how fucking hard you fucking go!’ Fingers up again. ‘Hold on! Wait! Then you say, Don’t worry about it. See here, watch, here’s what you do.’”

“Trump offered some stage direction, one hand up again for dramatic emphasis. ‘Then you say, it’ll all be all right because the relationship Trump has with Xi is so . . .’ A pause. A refinement. ‘It’s the best.’ Wait! ‘You’ve never seen such a good relationship between two presidents in your life. Maybe ever.’”

Woodward points out that Bossert never got a chance to take advantage of this advice because the TV interviewer didn’t ask him about trade…


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