Eugene Robinson: Trump's trade war with China could be synonymous with his electoral defeat

Washington • President Trump is conducting his trade war with China as if it was a zero sum game, but that is not the case. It's a negative sum game. Both sides are losing.

It is clear at this point that Trump's misguided combination of tariffs and abundance is detrimental to both economies. The question is who can bear the pain in a more stoic way: an autocrat mandated to govern indefinitely a tightly controlled one-party state, or a democratically elected president with a dismal approval number that faces voters in 14 months.

I think I know the answer. I think most people do it except Trump. The president seems to have drunk his own Kool-Aid as a kind of genius negotiator. Asked on Monday about his erratic and disruptive method, if you can call it that, Trump told reporters with a shrug: "Sorry, that's my way of trading." I'm also sorry. The whole world should be.

The revised figures released on Thursday show that the economy grew 2% in the second quarter of this year – not bad, but down sharply from the 3.1% growth recorded in the first quarter. Trump says on Twitter and during his rallies that the economy is not slowing down. The statistics of his own administration prove that this is not true.

In fact, the economy is growing at about the same pace as in the last quarter of the Obama administration – with the difference that economists now fear that we are going into a recession.

For financial markets, this is essentially a loss of 12 months. The trend is that investors feel comfortable, that the stock indexes realize gains, then that there is another fierce conflict in the trade war and that the markets make the gains. As many experts have predicted, the "high sugar level" resulting from tax cuts granted to upper class companies and Trump companies has blurred without most Americans really benefit. Middle class families who have benefited from a modest tax cut perceive the bulk of the unexpected profits generated by the price increases of products covered by Trump's tariffs.

"I think our tariffs are very good for us, we are taking tens of billions of dollars, China is paying for it," Trump lied last week. In fact, China does not pay a cent. As Trump is well aware, tariffs are taxes paid by US companies that import Chinese goods, and the cost is ultimately passed on to the US consumer.

What destabilizes the markets more than the tariffs themselves is uncertainty about the direction of this useless trade war. Trump's statement last Friday that US companies were "ordered by the present" to stop doing business in China was ridiculous at first sight, but it had to make its followers more loyal nervous. And his tweet asking whether Chinese leader Xi Jinping or Federal Reserve Chairman Jerome Powell was "our biggest enemy" can only be described as crazy.

With all his tariffs and all his tirades, Trump has only succeeded in one thing: to give the upper hand to Xi.

It is true that the trade war is hitting the Chinese economy, which this year is likely to experience the slowest growth in decades. But Xi can afford to play long game. And he surely knows that he holds in his hands the political future of Trump.

US polls that Trump calls "false news" are read not only in Washington but also in Beijing. Xi can see that Trump's reelection bid is in trouble. He can not miss the fact that Trump calls for economic recovery as the main reason he deserves a second term. And Xi needs to understand how the trade war contradicts the story of Trump's campaign.

If I were Xi, I would think that these are my choices:

I could look at Trump's unhinged performance at last weekend's G-7 meeting and decide that, overall, it is good for China to come from the world's major industrialized democracies without effective US leadership. By this reasoning, I could come back to the table and conclude a trade agreement – an agreement that would surely be favorable to China given Trump's desperation – and increase his chances of re-election.

Or I could sit down, take only modest countermeasures against US tariffs, play the role of reasonable adult against Trump's pet boy, overcome the pain that the trade war brings knowing that Trump injures more, and thus increases the probability of defeat. In my opinion, this is the option chosen by Xi. Chinese leaders do not like more unpredictability than the financial markets.

If Trump is "elected" to face China, it was a terrible choice.