Trump’s ‘best people’ bicker, as China approves business deals with the U.S.

What happens when you put the guy who wrote a book literally titled Death by China on a trade mission to China to seek compromises with China?

Well, according to Axios, it’s a foulmouthed shouting match, and a major policy rift between the top members of your trade team. Peter “Death by China” Navarro, a trade adviser to Donald Trump, cursed at his more moderate colleague, Treasury Secretary Steven Mnuchin, while the American trade team visited Beijing two weeks ago. A source said that it “stems from his belief that Mnuchin is steering them down the wrong path, policy-wise, with China,” and that Navarro felt shut out after Mnuchin decided to have a one-on-one negotiation with his Chinese counterpart, Liu He 刘鹤.

Navarro was indeed sidelined in negotiations, for a few days, as punishment for his behavior in Beijing, Politico reported. But Bloomberg reports today (paywall) that he is back in the core of the team for the second round of negotiations in Washington, for reasons undeclared.

In contrast to the unsurprising drama coming from Team Trump, there are some unexpected signs of normalcy returning to U.S.-China business relations:

• China approved a $8.35 billion acquisition of Microsemi Corp by the U.S.’s Microchip Technology Inc, the “first approval of a major technology deal” by China since last August, Reuters reports.
• Chinese antitrust regulators also finally approved the purchase of a majority stake in Toshiba’s microchip unit by an American group led by Bain Capital, the New York Times reports (paywall). Neither company is Chinese, but “antitrust regulators in China still have considerable say over whether the deal goes through,” and the deal’s delay had been “widely seen as a sign from Beijing of the ways it could punish American businesses if the Trump administration followed through on threats to impose tariffs on $150 billion in Chinese-made goods.”
• So perhaps Beijing is not expecting tariffs to actually go through, especially if Chinese officials can continue to go around Navarro and other hardline members of the American team. Indeed, the Financial Times reports (paywall) that the Chinese have an “appetite for treating [Mnuchin] as their lead interlocutor,” and that Liu He is “due to hold additional one-on-one meetings with Mr. Mnuchin and also join him for a private dinner” today in Washington.

Meanwhile, there are signs that U.S.-China economic relations will continue to see disruption for months to come, regardless of whether the tariffs and ensuing trade war happen:

• Legislation to curb Chinese deals moves through Congress / WSJ (paywall)
  “Bill strengthens CFIUS but doesn’t give it power to vet overseas joint ventures.”
• Venture capitalists fret over U.S. bill targeting Chinese investors / Bloomberg (paywall)
  “VCs fear that efforts to keep American inventions out of foreign governments’ hands will imperil their business.”
• On trade, the U.S. and China consider the unthinkable: breaking up / NYT (paywall)
  “Complete disengagement is impossible, but both Washington and Beijing envision a day when they don’t need each other as much to power their economies.”
• In Silicon Valley, Chinese ‘accelerators’ aim to bring startups home / Reuters