US-China trade deal chances ‘not very good:’ Gordon Chang

Channel: Fox Business
Published: 06/03/2019

Description
‘The Coming Collapse of China’ author Gordon Chang discusses escalating trade tensions between the U.S. and China. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. Headquartered in New York...



Transcript
But i want to turn now to trade. Turning to trade tensions with china and mexico, the wall street journal reporting both countries are willing to negotiate mexico's president says moments ago. He said he believes that the two countries, mexico and the us will be able to reach a deal, but on the china front, many are waiting to see what comes from the g20 meeting later this month joining us now the ...
coming collapse of china, author, gordon chang, I'M gon na read a tweet that somebody sent me and i just i want to get your reaction. You have to sound a little more positive. This is to me on china. We all know that once the chinadeal is done, the market is going to take off. Like a rocket ship, if the deal gets done gordon, what are the chances that we do get a trade deal done at this point with china? If you're talking about today, probably not very good, you only have one more off-ramp taken. That'S the g20 meeting where trump meets c jinping, but there's been very little staff work for that. Now you get two big guys in a room. Almost anything can happen, but there are political inhibitions on both sides that are arguing against the deal. The markets have consistently ignored those obvious considerations and so yeah the market can take off on any bit of news. Buti think that it's probably not going to be fundamentally sustained, there's no doubt been comparisons made, or just at least the pair obvious.

Parallel between this threat of tariffs with mexico and the 25 % tariff with china, but i have to believe i mean hearing mexico, say they're open to making this deal. I can't imagine that would have any influence on the chinese. If we come to some agreement in mexico, the chinese could still hold out and make this very painful, certainly but there's a one connection there ronica, and that is you know, we're trying to disengage the two economies. I think trump is actually trying to do that. Bringing factories back into the us buteven if we don't bring the factories back into the us, there's a really important advantage for us. If they go to central america, because that'll stabilize those communities there, you stabilize central america, it means you don't have the caravans coming up to the southern border. So this is really important for us and we're now starting to get indications from people that factories are thinking about central because they don't see any long-term real solution. Yeah there could be a trade deal between china in the us, but it ain't going to hold. But we got to point out, though this tariff threat against mexico is about immigration and that's what made people's heads explode right because itagain it's not about the economic relationship with china, it's about their theft, the forced surrender of technology, the theft of intellectual property, but also About the trade balance, but this is about immigration, so it's using tariffs to do something completely different. That was why people perplexed by the president wto violation by the way on our part - but you know i think trump really does have you know, there's an important point. Mexico is allowing this to occur. You got to stop it somehow.

I don't like the use of tariffs to do that, but in some way mexico's got to get realistic. Gordon. On the chinese side, we know what the detractors for a trade deal arehere and it's largely political. But what are the political winds in china against making any kind of trade deal with the united states? You know see. Jinping right now has an economy. That'S not doing very well, we can talk about where it is, but the point is he needs somebody to blame and also if he makes big concessions. Remember he owns this trade conflict in inside beijing right now. So if he gives important concessions to the us, people are going to blame him, and you know in the chinese system now which has been deinstitutionalized. You lose a conflict like this. You could lose your job, you could lose your freedom, you could lose. Your assetsyou could lose even more si. Jinping has a lot of incentives not to do a trade deal, which is why we're seeing all of this very hostile rhetoric out of beijing last month like over the weekend, though it was more it's kind of a little bit nicer, optimistic you looked at other.

You look at the white paper itself: it's pretty hardline, but we're willing to adopt a cooperative approach to find a solutions and the vice commerce secretary blah blah blah okay. So i'm not the one being negative. This board and you're looking at this like a chess game right, so you've talked about a few things, not just trade, but also immigration. Three steps aheadright. The democrats certainly aren't looking it that way. So no other president has wanted to take these issues on because they don't want the short term, meaning of it. How do you think it impacts president trump as we head into 2020? I think it's actually quite good for him because first of all he's not getting that much criticism from, for instance, chuck, schumer and others, and because you know china has now become a bad actor. So they just don't have the friends that they once did, and i think that you know when you look at it. The risk for trump are going to be sort of a trade deal where he gives concessions to chinayou got to remember. You know when vice president biden said china's no competition, he took a lot of flack. I think that you know president trump saw that and said look you know if i do a deal he's going to be in the firing line, so i don't think it for him. There is sort of like a big incentive to do a deal, gordon good, to see you thanks taken fingers crossed my fingers crossed.

There'S no deals so that we do not actually end up in a situation where we have another agreement that the chinese violate. They buy. More time they steal more us technology commit more trade violations. Fingers crossed no deal. No buttonno deal is better than a bad deal. Yes, gordon chang! Thank you. So much.


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