Trump's China Trade War May Shift Battlefields

(Bloomberg) --

After an almost year-long trade war, negotiations between the U.S. and China are entering the end game.

President Donald Trump’s plan to meet Chinese Vice Premier Liu He at the White House today has stoked expectations of an imminent summit with President Xi Jinping to seal an agreement.

Drafts of the deal would give Beijing until 2025 to meet commitments on buying large amounts of commodities and allow American companies to wholly own enterprises in China. For Trump, it’s important those big-money purchases go through to bolster his re-election chances next year.

It’s one thing to broker a deal and another to enforce it, however. There’s no shortage of critics who say China won’t make good on its pledges.

To counter that, U.S. officials say they’re confident they can rely on reform-minded allies in Beijing who are willing to deliver.

Trade Representative Robert Lighthizer, without naming names, reckons some top Beijing officials know protecting intellectual property and stopping forced technology transfers would help China’s economy.

Whether these reformers really exist or not, enforcing China’s promises is already shaping up as the next battlefield. Even if he wins a second term, Trump will be out of the White House before the judgment on China’s performance is in.

Global Headlines

China influence | China talks a lot about its support for European unity, but the Communist Party’s push for friends has it pursuing ties with right-wing populists, nationalists, EU-skeptics and anyone else willing to stay on message. Peter Martin and Alan Crawford dig into China’s European political ties to show just how deep they go ahead of European Parliamentary elections in May.

Decisive step | Late-night drama in the U.K. Parliament saw lawmakers approve legislation by a single vote to block a disorderly exit from the European Union. Momentum has shifted away from Brexiters in Theresa May’s Conservative Party who want a clean break from the bloc but must now watch as the prime minister tries to reach a compromise deal with the opposition Labour Party. The price is likely be much closer EU ties than they want.

Recipe for revenge | Special Counsel Robert Mueller’s indictment of 16 Russian individuals and companies for interfering in the 2016 presidential election is threatening to backfire. A federal judge must decide whether to order the U.S. government to turn over key evidence to one company, run by a man nicknamed Putin’s chef because of his close Kremlin connections. That could help the Russians learn how the U.S. detected their activities.

Daring to dream | At least five more Democrats are considering jumping into the 2020 presidential race — and that’s not counting Joe Biden. Lesser-known contenders who have tested the waters in early primary states aren’t daunted by the former vice president or the other big names among their party's 15 declared candidates. Some see the historically large field as an opportunity to break out from the pack in early balloting, Mark Niquette writes.

Merger exposure | Deutsche Bank’s plans to merge with local rival Commerzbank are provoking opposition from across the political spectrum in Germany as lawmakers from Angela Merkel’s conservative CDU find common cause with both the nationalist AfD and the anti-capitalist Left. While the Bundestag has little scope to halt the proposal, it can increase the pain for the deal’s government sponsor, Finance Minister Olaf Scholz, and executives leading negotiations.

What to Watch

• NATO Secretary General Jens Stoltenberg chairs a meeting in Washington today of foreign ministers to mark the military alliance's 70th birthday, amid tensions between key members Turkey and the U.S. Yesterday he delivered a subtle rebuke of Trump’s “America First” foreign policy.

• Israeli Prime Minister Benjamin Netanyahu is in Moscow for talks with President Vladimir Putin today, less than six weeks since his last visit to Russia and days before he faces parliamentary elections.
• Russian and Venezuelan officials hold an intergovernmental meeting in Moscow, as the Kremlin grumbles that President Nicolas Maduro’s regime is behind on debt repayments.
• House Democrats are formally demanding the IRS turn over six years of Trump’s personal and business tax returns, and have authorized a subpoena to compel Attorney General William Barr to provide Mueller’s full report and all the evidence behind it.

And finally...Australia has passed legislation aimed at stopping violent crime and acts of extremism from being live-streamed on the internet. The move comes after Facebook drew criticism for not being fast enough in taking down a video live-streamed by the alleged gunman behind the deadly mosque attacks in Christchurch, New Zealand. The law carries penalties of up to 10 percent of a company’s annual turnover and potential prison sentences for social media executives.

--With assistance from Rosalind Mathieson, Alan Crawford, Kathleen Hunter, Stuart Biggs and Ben Sills.

To contact the editor responsible for this story: Anthony Halpin at thalpin5@bloomberg.net

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