Trade War: China wants Trump re-elected in 2020 for its economic agenda – here’s why

November 8 2019

China wants Trump re-elected in 2020 to achieve medium-term and long-term economic objectives, affirms the CEO of one of the world’s largest independent financial advisory organizations.

The comments from Nigel Green, chief executive of deVere Group, come after China fuelled hopes that a deal can be reached to end its trade war with the U.S. after agreeing with Washington to roll back on some tariffs.

The deal to reduce trade tensions could encourage the International Monetary Fund (IMF) to revise up global growth forecasts next year.

Mr Green notes: “There has been an argument that in regard to the trade war, China was holding out, playing the long game and waiting for President Trump to leave office, before dealing with another administration.

“Whilst this argument might have held water before, I now believe this is not the case – and it is what is fueling recent developments in the trade war negotiations.”

He continues: “It is likely that China is currently fueling hopes to reach a phased agreement in the trade dispute with the U.S. and cancel tariffs as soon as possible because it will help President Trump’s re-election.

“His re-election would suit them for two major reasons.

“First, because they will assume that reaching a deal with Trump to end the damaging trade war will probably be easier than with some others. These include Elizabeth Warren, the potential Democratic rival, who could, say many supporters, win next year’s presidential election.  

“Ms Warren can be expected to be even tougher with China than Trump, and not only on trade, but on other difficult issues, including climate change and human and labor rights.

“And second, despite the trade war, Trump’s policies and rhetoric have proven to be strategically helpful to China in achieving its longer-term goals.  

“In many respects, President Trump has undermined Washington’s global credibility, international governance bodies and key alliances, and has been indifferent if not antagonistic towards major trading agreements.

“This all compromises America’s standing as the world’s primary superpower and it provides China with openings and opportunities it has previously never had in terms of global influence and setting international trade conventions.” 

The deVere CEO concludes: “The positive signs coming from Beijing and Washington on the trade talks between the world’s two largest economies have been welcomed by stock markets – some reaching all-time highs this week.

“Investors’ exuberance will grow further still should the deal be cemented, and also should Trump be re-elected.

“However, U.S. investors should perhaps also question whether Mr Trump’s administration has, in fact, handed China a great strategic opportunity that could damage America’s preeminent superpower status in the longer-term and, therefore, its economic dominance.”

SME investment is the elephant in the general election war-rooms

Political uncertainty has caused a reduction of business investment in the UK by 11%

Jenny Tooth OBE, CEO of the UK Business Angels Association, calls for an end to “deafening silence” of politicians regarding SME investment

Now that the majority of the party leaders have launched their general election campaigns, there will now be five weeks of battling to decide which prospective vision for Britain captures the imagination of British voters best. However, the elephant in the room still remains the sustainability of the British economy post-Brexit, and how to reinvigorate investment that has dried up throughout the three and half years of political limbo and chaos.

Uncertainty in the British economy due to an inability to find a Brexit resolution has seen business investment into the UK cut by 11 percent, or the equivalent of £20bn. Just last month, the Office for National Statistics announced that labour productivity in the second quarter of 2019 fell by half a percent, the worst performance since 2014. Now, with an election looming and no guarantee that a majority will be secured, British businesses have been thrown further into the lurch regarding investment opportunities for growth.

Jenny Tooth OBE, CEO of the UK Business Angels Association, has called on leading ministers at the Department for Business, Energy and Industrial Strategy (BEIS) to speak up for SMEs to provide much needed confidence and stability.

“The silence from the ministers at the Department for (BEIS) has been deafening. Just a month ago we had a proposed Withdrawal Agreement that at the very least, gave businesses an idea of what the future looked liked, and how they needed to plan ahead. Now, we are in an election cycle, and we are back to square one.

There are 5.9 million SMEs in the UK. In other words, 99.9% of the businesses in the UK are SMEs. How can an economy be galvanised and strengthen if its very lifeblood is left in the precarious position of not knowing what is on the horizon. 60% of the British workforce works within an SME, with SMEs accounting for 52% of all turnover in the British economy. I find it quite remarkable that nothing is being said in defence of SMEs and their importance to the British economy.

I call on Andrea Leadsom at the Department for BEIS to speak up for small businesses on the election trail, and shadow secretary Rebecca Long-Bailey along with the other parties spokespeople to provide a clear vision as to how they will guarantee the longevity of SMEs in the UK to ensure that their dynamic input to the British economy will be maintained.”