Trump impeachment clouds prospects for US-China trade war talks

HONG KONG — Beijing held to diplomatic protocol and declined to comment on the US House of Representatives’ vote on Wednesday (Dec 18) to impeach President Donald Trump, but with both nations locked in trade war talks observers said the negotiations could face new obstacles.

The impeachment process would likely distract Mr Trump from resolving the trade conflict between the world’s two biggest economies and erode the credibility of his administration, they said.

In a largely partisan decision, the House voted to impeach Mr Trump on charges of abusing power and obstructing congressional investigations. Mr Trump will now face a trial in the US Senate, where he is expected to be acquitted because it is controlled by his Republican Party.

However, Mr Trump will also be focused on his re-election in 2020, which may result in renewed attacks on Beijing to address the US trade deficit with China.

Mr James Zimmerman, partner in the Beijing office of law firm Perkins Coie and a former chairman of the American Chamber of Commerce in China, said the impeachment pointed to further erosion of the credibility of the office of the US presidency.

“The Chinese view is that Trump has squandered whatever political capital he had and will get nothing done in Congress. Trump is also in an embattled state and clearly distracted by an ongoing process that eventually will be a trial before the Senate,” Mr Zimmerman said.

He said Mr Trump could not “focus any quality time” to manage a host of issues, including the trade negotiations with China.

“A worst-case scenario is that Trump reignites the trade war to direct public attention away from impeachment in a feeble attempt to shore up public opinion,” he said.

Declining to comment on the matter, China’s Ministry of Foreign Affairs said on Thursday that the impeachment process was a domestic issue for the United States.

The Ministry of Commerce said separately that both countries were in close communication on the signing of what has been called phase one of a deal to resolve trade differences that led to tit-for-tat tariffs on billions of dollars worth of products.

That agreement will involve the removal and reduction of some tariffs and China buying more US agricultural products. Further talks on a phase-two agreement are expected but no details have been released.

The commerce ministry also declined to comment on the impeachment process and how it could affect the China-US trade negotiations.

Mr Lu Xiang, a research fellow on US-China relations with the Chinese Academy of Social Sciences, said that while the impeachment “is not a fatal blow” to Mr Trump, it was likely to distract his attention and delay the handling of new challenges by his administration. That could slow the progress of resolving US-China trade disputes.

“What matters to China is that the trade deal is mutually beneficial and warrants further de-escalation of the trade tensions,” Lu said.

The US confirmed that it will roll back of some of the tariffs on Chinese products, and China said on Thursday that from December 26 it would grant a one-year tariff exemption on six products imported from the US. The Customs Tariff Commission of China’s State Council has said it will continue to unveil new waiver lists at an appropriate time.

US Treasury Secretary Steven Mnuchin said on Thursday the US and China would sign their so-called phase one trade pact at the beginning of January, adding that it was completely finished and just undergoing a technical “scrub”.

Mr Mnuchin, speaking on CNBC, said the trade deal had already been put down on paper and translated, and that it would not be subject to any renegotiation.

“We are going through a technical issue now where again the agreement is translated,” Mr Mnuchin said. “I don’t expect there’s any changes. We’ll sign the agreement in the beginning of January.”

Whatever the outcome of the impeachment process, Beijing and Washington are now involved in a rivalry for world economic and political influence that will outlast Mr Trump’s term in office, even if he is re-elected, political analysts and academics have said.

The phase-one trade deal between the two countries was a good start but their competition would not be resolved in the short term, said Mr Fan Gang, director of the Beijing-based National Economic Research Institute.

A longer-term view was needed because the current issues would not be resolved in the next five or 10 years, Mr Fan told the Sinopec Capital Annual Forum in Beijing on Wednesday. SOUTH CHINA MORNING POST