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Donald Trump is on a week-long tour of Asia. He will visit Malaysia, Japan and South Korea. The highlight of the trip will be a meeting with Chinese President Xi Jinping on Thursday. The trip is mostly about trade and tariffs. In Kuala Lumpur, the Malaysian capital, Trump met leaders from a number of Asian countries. One achievement was an agreement to coordinate on unfair trade practices in order to penalize Chinese entities. It seems to mean that if the U.S. puts sanctions on some Chinese company, the other Asian countries would respect it. This is sort of a watered-down version of the Trans-Pacific Partnership Barack Obama worked out 10 years ago to get the other Asian countries to help rein in China. Trump immediately killed it in 2017. In return for agreeing to do Trump's bidding now, the countries get a bargain-rate tariff of only 19% on all their exports to the U.S.
In addition, Malaysia agreed to invest $70 billion in the U.S. over the next 10 years. This could include 3 years of planning and then, when Trump is no longer in office, ditching the rest of it. One somewhat more concrete promise was from Thailand to buy 80 Boeing aircraft worth $19 billion. This might be an actual achievement, since Thai Airways has both Boeing and Airbus planes and this deal could make the fleet more Boeing-heavy. There was also a vague non-binding deal on some minerals.
One item missing from his discussions with Asian leaders is the sticky bit about rules of origin. China tries to evade U.S. tariffs by shipping all the parts for some product to, say, Thailand or Malaysia, putting them together there, and shipping the final product to the U.S. as a Thai or Malaysian product, thus escaping the tariff on Chinese products. Making rules about "where" a product is from is extremely technical and detailed and, as you may have heard, "technical and detailed" is not Trump's thing. Nevertheless, without a clear and enforceable definition of "origin," China can effectively transship Chinese products via other Asian countries and escape tariffs. Nothing Trump did makes any progress whatsoever on reducing China's role as the world's factory or helping American manufacturers.
The next stop is Japan, where Trump will meet Japan's new prime minister, Sanae Takaichi, the first-ever female prime minister of Japan. Trump doesn't like female leaders, as he thinks they are weak. It should go swimmingly. He wants her to agree to invest hundreds of billions of dollars in the U.S. In reality, no Japanese prime minister can force Toyota or Sony or Panasonic to build a factory in the U.S. They do that when it makes business sense for them. Again, they could spend 3 years looking for land, maybe buying a parcel, begin getting permits, and after three years if it makes no business sense, just forget the whole thing. But now every leader in the world knows that all Trump wants is a "win," something he can brag about. Whether it actually happens later is of no interest to him. When he was an actual businessman, he wasn't like this. If he made a deal to build a hotel, apartment building or office building, he actually expected it to be built as specified in the contract. On the other hand, Trump was very pleased to know Takaichi plans to buy some Ford F-150 trucks. He said "She has good taste. That's a hot truck."
After Japan, it is South Korea, where Trump will meet Xi Jinping. Secretary of the Treasury Scott Bessent has said there is a framework for a plan in place. It is very vague, but it appears that after all the huffing and puffing, Donald Trump has dropped his threat of 100% tariffs on China and achieved... the status quo ante. China will again allow the export of rare earths (for another year) and again buy American soybeans. Basically, Trump's great achievement is restoring the situation as it was before he started huffing and puffing. But his new deal with China does nothing to impede China's upward march to become the world's dominant economic power. William Shakespeare wasn't thinking about Trump's approach to China when he wrote "It is a tale told by an idiot, full of sound and fury, signifying nothing," but when the shoe fits...
This is not Xi's first rodeo. He thinks long term. He knows if he gives Trump the illusion of some kind of "win" now, Trump will be happy and not worry about the details, even if nothing changes in the end. There is no reason for Xi to make any serious concessions on anything if he can get away with agreeing to buy a few million tons of American soybeans. Why should he? Trump should have threatened China with something he was prepared to actually do to get serious concessions from Xi, but he didn't. Trump is simply not used to negotiating with people who are as strong as he is, who hold many cards, and who have a very different idea of what a good deal might be. Also, Xi is well briefed by his experts and understands the details in many areas, which Trump does not. It is doubtful that Trump will get much of substance from Xi, just a nice photo-op and some soybean sales. But with a bit of luck, he can convince American farmers that he is a genius for saving them from the destruction brought on by his own poorly thought-out plans. (V)