President vows to end reliance on Beijing as he ratchets up anti-China rhetoric in re-election campaign
[Brendan Greeley | September 7, 2020 | FT]
Donald Trump raised the prospect of “decoupling” the US economy from China and claimed that America was experiencing “the fastest recovery in US history”, honing his economic messaging as the presidential campaign enters its final stretch.
Mr Trump, who made China a central focus of his 2016 campaign, previewed a tougher line on trade with Beijing in a press conference held in front of the White House on the Labor Day holiday, with less than two months to go before the election on November 3.
Mr Trump said that “decouple” — which economists have used for a decade to refer to a potential permanent drop in trade between the two countries — was “an interesting word”.
“If we didn’t do business with [China], we wouldn’t lose billions of dollars,” Mr Trump said on Monday. “It’s called decoupling. So you’ll start thinking about it. You’ll start thinking they take our money and they spend it on building aeroplanes and building ships and building rockets and missiles.”
The president also threatened to block companies that outsource jobs to China from receiving federal contracts, and vowed — as he did during the 2016 campaign — to bring manufacturing jobs and crucial supply chains back to the US.
“We will make America into the manufacturing superpower of the world and will end our reliance on China once and for all,” he said. “Whether it’s decoupling, or putting in massive tariffs like I’ve been doing already, we will end our reliance on China, because we can’t rely on China.”
The president promised to get tough on trade with China during the 2016 campaign and secured a limited “phase one” trade deal earlier this year. But the trade deficit with China has remained stubbornly high. Data released by the commerce department on Thursday showed the US trade deficit with the Asian country increased by $1.6bn to $28.3bn in July.
Mr Trump has said the US would hold China accountable for the devastation wrought by the coronavirus pandemic, which has killed more than 181,000 people in the US. In recent months his administration has taken aim at Beijing over a host of issues, ranging from pro-democracy demonstrations in Hong Kong and alleged abuses against Uighurs in Xinjiang to accounting standards for US-listed Chinese companies.
The president painted his Democratic rival, Joe Biden, as a “pawn” of Beijing, saying the former vice-president will “surrender our jobs to China, our jobs and our economic wellbeing”.
Mr Trump and Mike Pence, his vice-president, used the Labor Day holiday to depart from their campaign’s focus on imposing “law and order” and cracking down on civil rights demonstrators to offer an economic message: the virus will be contained soon, and the economy has started to recover.
“The United States experienced the smallest contraction of any major western nation,” said Mr Trump. “Our rise is spectacular and we’re rebounding much more quickly from the pandemic.”
In the US, GDP dropped 9.5 per cent in the second quarter. That is better than Germany or the UK, but worse than South Korea or Japan, where the economy slowed by 7.8 per cent over the same period. Mr Trump also pointed to an encouraging jobs report from Friday, which showed unemployment at 8.4 per cent.
The US has recovered about half of the 22.2m jobs lost during March and April, amid widespread lockdowns.
“We’ve gone through a time of testing,” said Mr Pence, speaking on Monday to about 250 workers and guests at the Dairyland Power Cooperative in La Crosse, Wisconsin. “We’re soon coming to a time of choosing.”
Under Mr Trump, “the era of economic surrender is over”, he added.
Mr Biden and his Democratic running mate, Kamala Harris, also made trips to battleground states on Monday. Mr Biden travelled to Pennsylvania, where he met with union leaders. Ms Harris was in Wisconsin to visit with family members of Jacob Blake, a black man who was shot by a police officer in an incident that has added fuel to anti-racism protests across the US.