Trade war, day 56: Trump ties North Korea to trade, again

At this point, U.S.-China trade relations seem locked in to a tense state for months to come, with only a stalemate or further escalation seeming likely at least through November.

But now, Donald Trump reminded us of a third option: the dispute could also become more complicated and wide-ranging. Last evening, he tweeted out a White House statement yesterday evening:

• “President Donald J. Trump feels strongly that North Korea is under tremendous pressure from China because of our major trade disputes with the Chinese Government,” the statement began, going on to say,
• “As for the U.S.-China trade disputes, and other differences, they will be resolved in time by President Trump and China’s great President Xi Jinping. Their relationship and bond remain very strong.”

There are a couple things to note about this statement:

• This isn’t the first time Trump has connected the North Korea issue explicitly to the U.S.-China trading relationship.
  • In December 2017, he told the New York Times (paywall), “China…If they’re helping me with North Korea, I can look at trade a little bit differently, at least for a period of time. And that’s what I’ve been doing,”
  • On July 9, 2018, soon after the trade war officially started, he made the same accusation against China as now: that it “may be exerting negative pressure on a deal because of our posture on Chinese Trade.”
• Most experts don’t see the connection. Robert Kelly, a professor of political science at Pusan National University in South Korea, has some reactions to President Trump’s statement, and experts generally don’t consider any country — even China — to have a decisive influence in North Korean foreign policy.
• Xi Jinping has never said, or even indicated through subordinates, that he shares any particular affection for Donald Trump.
• The Chinese Foreign Ministry outright mocked the implications of Trump’s statement, with a spokesperson describing it as “misrepresentative, irresponsible, nonsensical logic,” adding, “There really isn’t a normal person who is capable of understanding it,” the Asia Times reports.

Other trade war and related news:

• Victims of the trade war
  Bloomberg moves new forum for elites from China amid fallout of trade war / NYT (paywall)
  Michael Bloomberg, the New York billionaire, has moved his “New Economy Forum” — a gathering of global business and political leaders — from Beijing to Singapore due to the political sensitivities of the trade war. Bloomberg is reportedly considering running for president in 2020, and “if that is the case, then keeping a distance from China could be advantageous, since it has become a punching bag for American politicians across ideologies,” the Times notes.
• Signals from Beijing
  US ‘hard lines’ not helping to solve trade war, Beijing says / SCMP
  China urges US to make ‘right decision’ as $200B tariffs near / Bloomberg (paywall)
  “The U.S. should ‘take note of the calling from businesses and consumers in both countries, the fact that both countries are linked closely in the supply chain and the fundamental interest of the two peoples to make the right decision,’ Ministry of Commerce spokesman Gao Feng said at a regular briefing in Beijing on Thursday. Over 90 percent of businesses consulted on the tariffs oppose them, Gao said.”
• Financial risk and macro outlook
  China banks managing $16 trillion can’t stop talking about risk / Bloomberg (paywall)
  China’s yuan sinks, but neither its central bank nor investors are showing signs of panic / SCMP

Previously in The China Project’s trade war coverage:

Trade war, day 55: China only third priority after NAFTA, EU