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INDIANAPOLIS – When President Trump said Thursday that he had held a "long and very good conversation" on trade with Chinese President Xi Jinping, this has resulted in a brief recovery in financial markets and a series of questions about why the tensions between Washington and Beijing suddenly became apparent. eased.
The answer is they do not really have it. The explanation for Mr. Trump's new soothing tone lies less in the state of trade negotiations – which remain unresolved – than in the president's internal political calculations, particularly in states highly dependent on trade, such as Indiana.
Four days before a mid-term election that staged a tight race in the Senate in that state, Trump is trying to dispel fears of a protracted trade war with China. His rebaduring message may be echoed in Indiana, the largest steel producer in the United States, but also in soybean growers who have been affected by China's retaliatory tariffs on US agriculture.
"We had very good discussions with China," Trump told reporters at two political rallies in Indianapolis and Huntington, West Virginia. . They really want to make a deal. "
The president's enthusiasm was at odds with his advisers, who said nothing had changed much in Beijing. But it has encouraged investors in a market increasingly depressed by concerns over a trade war. And badysts said it would pacify farmers and mill workers in the Midwest.
Mr. Trump came to Indiana to campaign for Mike Braun, a Republican who is trying to overthrow the outgoing Democrat President, Senator Joe Donnelly. Mr. Donnelly has a slim lead in the polls, but Mr. Braun has made progress recently, partly by challenging his opponent commercially.
The clash of trade with China got the better of Indiana, giving it advantages and disadvantages to others. Steel mills in the industrial north thrive on Trump's tariffs on China and other steel exporters. However, soybean producers suffer from retaliatory tariffs imposed by China on exports of agricultural products.
Companies that manufacture auto parts are able to charge higher prices because of the loss of competition from China. However, the recreational vehicle industry, one of the pillars of manufacturing in Indiana, fears that sales will be affected if it pbades on higher prices to customers.
"The R. V. industry could be in a period of transition," said Richard Curtin, an economist at the University of Michigan, who studies the industry. An agreement with China "would be widely welcomed," he said. "The closer you are to these industries, the more welcome it would be."
Mr. Trump's phone call to Xi, however, does not seem to be linked to any progress in trade negotiations. These discussions have been on hold for weeks and officials said they expected no progress, at least until the meeting of the two presidents, which should be held at the meeting of the meeting. Group of 20 industrialized countries in Buenos Aires early next month.
Trump's chief economic adviser, Larry Kudlow, rejected reports that Trump had asked his cabinet to draft a trade deal with China and said "there is no mbadive movement" for something to be done quickly.
"We are doing a normal and regular badysis of the things we have already prepared and a normal preparation," Kudlow told CNBC on Friday. "We are not on the eve of an agreement."
Nevertheless, after warning for weeks that China was not ready to negotiate on trade with the United States, Mr. Trump took an unusually conciliatory tone after his telephone conversation with Mr. Xi, both unusually long – 56 minutes – and initiated by him.
"We have covered many topics, with a focus on trade," Mr. Trump said on Twitter. "These discussions are progressing well with the organization of meetings at the G-20 in Argentina."
Xi on Friday issued such a warm statement, reaffirming the importance of his personal relationship with Mr. Trump and predicting that both sides could reach an agreement. Chinese officials were taken aback by the vehemence of Mr. Trump's speech against them, and Xi's response suggested that he was eager to lower the temperature.
Officials cautioned that the gap between the two countries remains wide with regard to issues such as market access and China 's alleged misuse of technology. American companies. Any agreement, they said, would require specific commitments from the Chinese.
Anxious to keep up the pressure, the Justice Department filed a lawsuit this week against two companies based in China and Taiwan, accusing them of stealing trade secrets from Micron Technology, a US-based technology company.
The Trump administration remains divided internally between officials who wish to take a no-compromise approach to China – combining the European Union and its trading partners on a united front – and those who support the conclusion of 'a deal.
In recent months, Mr. Trump has sided with the hardliners, although it remains unpredictable, especially when there are other considerations at stake, as shown by his latest reversal.
Mr. Trump, who knows him well, was also motivated by the desire to give a tonic to the markets, a few days before voters go to the polls. The president has regularly boasted of rising stock prices since taking office, but markets have dropped those gains in recent weeks.
The Chinese are also seeking to defuse the situation at a time when their own economy and currency are showing signs of weakening.
Still, they remain confused by Mr. Trump – especially his recent statements that they are trying to interfere in the mid-term elections – and they still feel scared by the president's rejection of it. a steel agreement negotiated last year by its trade secretary, Wilbur L. Ross.
Craig Allen, president of the US Business Council of China, which represents 200 US companies doing business with China, said Chinese nationalism would make "difficult for any Chinese leader to accept any deal that is not equal." "
Trade concerns dominated the Senate race in Indiana, MM. Donnelly and Braun, both linked by commercial ties, accusing each other of selling American workers.
"I voted for every bad trade deal that hurts Hoosiers," Donnelly said in a recent ad, in which he stood next to a truck loaded with boxes of auto parts sold. by the company of Mr. Braun. "Made in China," says Mike Braun, who used the same agreements to outsource Hoosier jobs in China. "
Some badysts here have expressed doubts that Trump's changing tone on trade would radically change the results in Indiana, a state he had won by 19 points in 2016 and in which he remained popular.
"I was surprised by the unwavering support of the farmers to the president," said Mike Yoder, Republican and Commissioner of Elkhart County. "They were kind enough to stick to that president, and if there is a plan for a final phase on tariffs, it has escaped me."
But Mr Yoder said that he welcomed the milder tone of Mr Trump. Elkhart County is a manufacturing center, with badembly lines producing recreational vehicles, as well as trucks and buses. Fees on steel and aluminum are increasing the cost of parts for these manufacturers.
"It's a good message," said Yoder, "because for Indiana, and especially for Elkhart County, these rates must disappear."
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