The announcement by Nancy Pelosi Tuesday that House Democrats had reached a deal with the Trump administration to support a new North American trade pact was celebrated by liberals, conservatives, Democrats and Republicans.
But it is bad news for Beijing’s trade hawks.
The nationalist wing of the Chinese Communist Party has been pushing the regime to resist any serious compromise in trade negotiations with the United States. Many of Xi Jinping’s advisers have argued that the U.S. government is so deeply divided that the better strategy is for China to hold out hope for a better deal from a weakened Trump presidency or a new Democratic regime. The push for impeachment is widely viewed within China’s state economic apparatus as evidence that U.S. government is virtually paralyzed by division.
Some inside of China also believe that impeachment could push Donald Trump to agree to a trade deal quickly in order score a public “win.”
The USMCA agreement, however, puts a historic public trade victory onto the scoreboard for Trump. It is the first trade deal in generations supported by the left and right, labor unions, and free-traders. It suggests that on trade, America is far less divided than it is on many other issues.
Pelosi and Democrat negotiators worked closely with labor leaders and the Trump administration team, led by U.S. Trade Representative Robert Lighthizer, to strengthen the agreement from the U.S. perspective. That level of cooperation on trade also suggests that the Chinese hawk view badly underestimated the ability of the U.S. political system to operate effectively despite deep partisan divisions.
Some in Chinese policy circles who thought Trump might seek a quick trade deal have also worried that Democrats would seek to pressure the White House out of reaching an agreement.
“From the perspective of electoral politics, Democrats have reasons to hinder the Trump administration from reaching any agreement with China that can be touted as a ‘victory,’” a Global Times op-ed recently claimed. “They want the US public to focus on the impeachment, and would pour scorn on any compromise the Trump government could make in trade negotiations with China.”
The USMCA deal highlights a possibility that is even worse from the Chinese nationalist perspective: a U.S. government that stands together in demanding tough trade deals.