By Robert Costa, Josh Dawsey and Sean Sullivan
The Washington Post
WASHINGTON — President Donald Trump is telling advisers and close allies that he has no intention of pulling back on his escalating trade war with China, arguing that clashing with Beijing is highly popular with his political base and will help him win reelection in 2020 regardless of any immediate economic pain.
Administration officials and outside Trump advisers said Tuesday that they do not expect him to shift his position significantly in coming days, saying he is determined to endure an intensifying showdown with Chinese President Xi Jinping despite turbulence in global markets and frustration within his own party.
Trump’s defiance is rooted in decades of viewing the Chinese as economic villains and driven by his desire to fulfill a core promise from his 2016 campaign: that he would dramatically overhaul the U.S.-China relationship. The confrontation is also fueled by Trump’s willingness to flout the norms of presidential behavior, including his suggestion on Tuesday that the Federal Reserve should assist his trade efforts by lowering interest rates.
“I don’t see him crying uncle anytime soon,” said Stephen Moore, a conservative economist who withdrew from consideration as a Trump Federal Reserve Board nominee amid an uproar. “It’s a high-risk strategy, but it’s not in his personality to back down. This goes back to what he said that first time he came down the escalator at Trump Tower.”
Speaking to reporters Tuesday before boarding Marine One en route to Louisiana, Trump insisted that he is in a “very, very strong position” and called the stalled negotiations “a little squabble.”
Trump cast the strength of the U.S. economy as leverage, saying, “We have all the advantage.” And he threatened to impose $100 billion in additional tariffs, saying, “We’re looking at it very strongly.”
But as Trump expresses confidence, there have been tensions inside the White House, with some advisers uneasy with Trump’s strident nationalism and firm belief in tariffs as economic weapons. The disagreements reflect broader distress within Republican circles about the president’s sharp rhetoric and refusal to budge.
“I don’t like directionally where it’s going,” said former White House communications director Anthony Scaramucci, a prominent investor. “The economy is still very strong. It’s not clear to me it will fully derail the economic story. But it could put a dent in the stock and bond market.”
“Tariffs are blunt instruments. They can inflict on competitors and be a source of leverage for negotiations,” said former White House staff secretary Rob Porter, who at times engaged in heated discussions with Trump on trade. “They can also have significant consequences for global supply chains and domestic producers and consumers, and any decision on tariffs should include careful consideration of all these consequences.”
Trump has worked to contain his current advisers as the negotiations have unfolded and present a united front to the Chinese, who he believes are looking for weakness, according to multiple officials, many of whom spoke on the condition of anonymity to share private discussions. With Scaramucci, Porter and others who are alarmed now gone from the White House, Trump has found it easier to navigate his own administration and govern by his own instincts.
Trump was irritated on Sunday after National Economic Council Director Larry Kudlow acknowledged on “Fox News Sunday” that American consumers end up paying for the administration’s tariffs on Chinese imports, contradicting Trump’s claim that the Chinese foot the bill, officials said.
“Trump called Larry, and they had it out,” according to one White House official who was not authorized to speak publicly. Two other officials, however, described the conversation as cordial and said Trump and Kudlow went back and forth on trade, with Trump telling Kudlow several times to “not worry about it.”
Republicans close to the president have said they’ve come to accept the president’s hard line, even if they do not share it.
“The president believes tariffs are good economic policy. They are a tool to bring about trade,” said Sen. Lindsey Graham, R-S.C., a Trump confidant. “Trump has been consistent on trade for 30 years.”
Graham said Trump often speaks about China in sweeping ways that underscore his unwillingness to flinch. Aides to the president say he comments about how many goods are made at low cost in China and how he believes China does not pay their workers or follow international laws. These people say he also bragged to aides about how much he has damaged the Chinese economy.
At a “Cocktails and Conversation” gathering of Republicans at the luxe 21 Club restaurant in New York City on Monday night, former Trump economic adviser Gary Cohn said he felt that the president might want to keep the debate over trade alive for the 2020 election because he believed it is a winning campaign issue, according to one attendee who was not authorized to discuss the meeting publicly.
Cohn, who has long been critical of tariffs, also worried aloud that the clash could do lasting damage to the nation’s farming industries and said the Trump administration’s effort to offset the effect of the trade war on U.S. farmers by supplying subsidies for them is not a sufficient approach if markets are lost, two attendees said. Cohn compared Trump’s strategy to treating cancer with a Band-Aid, they said.
Still, Cohn said, Trump could win a second term on the strength of the U.S. economy. He added that the president could run on a “3-3-3” platform, meaning about 3 percent for unemployment, GDP growth and wage growth, two attendees said.