Donald Trump might be about to face an impeachment trial but he has scored one of the most important wins of his presidency with his Phase One trade deal with China.
In political terms this China deal is likely to be many times more consequential than impeachment when Americans consider who to vote for in November’s presidential election.
Is the deal perfect? No. China still has a long way to go before it truly reforms its litany of unfair trading practices.
But this Phase One deal which compels China to buy $US200 billion more US goods and reform some of its unfair trading practices is something that Trump can rightfully sell as a big win to his supporters.
It is a deal that looked unachievable only six months ago when both countries were caught up in an ever-escalating trade war.
The deal allows the president to frame an election message that he confronted China as he promised he would in 2016 and then forced it to the negotiating table with his tariff trade war.
This will resonate far more loudly in the key swing states in the Midwest than will the impeachment saga which, according to polls, has had almost zero impact on voting intentions.
For Trump the China deal helps to solve some looming problems. The first is that it will help ease the pain of America’s farmers who have borne the brunt of the tariff trade war and who have faced rising bankruptcies despite Trump’s farm subsidies.
Many of these farmers live in Wisconsin, Pennsylvania and Michigan — three of the key swing states that Trump must win to secure a second term.
The Phase One deal requires China to purchase a hefty $US32 billion more in US farm products over the next two years, a welcome relief for those farmers who have seen prices and demand for their products tumble since the China trade war began in early 2018.
Secondly, the deal marks a pause in the trade war which will boost consumer confidence and will reduce the prospect of a continued slowdown in economic growth which has eased to around 2 per cent, less than the 3 per cent promised by Trump.
The economy, with its low unemployment and inflation, is Trump’s most powerful weapon and he needs to keep it humming until election day.
Despite the Phase One deal, substantial US tariffs remain in place on two-thirds of all US imports from China.
Trump says this will allow him some leverage and clout in negotiations for the more difficult Phase Two deal which aims to tackle China’s more entrenched unfair trade practices such as the subsidies it gives to Chinese firms.
A Phase Two deal is unlikely to be concluded before the election because the Chinese are likely to wait in the hope that Trump is defeated by a free-trade Democrat. It may be that China can never be persuaded to agree to the type of structural reforms which Trump will demand in a Phase Two deal.
But, as Otto Von Bismarck said, politics is ‘the art of the possible.’ Trump appears to have got the best deal with China that was possible at this point in time. That is something he can take to the next election in the knowledge that it will help his election prospects much more than impeachment might hurt them.
(Cameron Stewart is also US Contributor for Sky News Australia)
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