Donald Trump’s is the White House that can’t shoot straight, policy-wise. But last week highlighted the extent to which key Trump team members are firing at each other, and in ways that should worry emerging markets. Chinese Vice-Premier Liu He visited Washington to tamp down the threat of a giant trade war. The real stand-off, though, is between Treasury Secretary Steven Mnuchin and Trump adviser Peter Navarro. Mnuchin favours a US-China trade; Navarro wants to build a great wall of isolation around Trump Nation. The more Xi helps Trump’s detente process with North Korea, the more conciliatory Washington will appear on trade Last week’s talks got us no closer to knowing which of these hacks might be fired first – in a more perfect world, neither would get within miles of the Oval Office. But that’s what happens when a leader covets loyalty and bombast over skills. But the odds favour an ultimate Navarro triumph, adding to the troubles coursing through emerging markets. Like clockwork, Argentina’s financial chaos spread to Turkey and, increasingly, Indonesia. Fitch Ratings last week warned that developing-nation government debt has quadrupled since the dark days of the 2008 global crisis. That, coupled with rising US bond yields, has Harvard’s Carmen Reinhart worried that 2018 could be even worse for the emerging world. Trump’s erratic policy is a key reason why. One of his most consistently applauded lines at rallies around the US is the idea of taking China down a peg. At the moment, Trump is playing nice with Xi Jinping, not because he suddenly became a free-trade champion. No, Trump’s eye is still on the prize – the Nobel Prize. Trade war averted? China vows to buy more from US, but truce will take time This overriding goal is creating false hope on US-China trade. Every concession Trump makes – like aiding ZTE’s access to US markets – is partly about that Oslo medal ceremony. The more Xi helps Trump’s detente process with North Korea, the more conciliatory Washington will appear on trade. For now, at least. There are two reasons Navarro and his anti-China ilk will return to the ascendancy. One, Trump’s Nobel dreams are naive. His surreal bromance with Kim Jong-un had quite the reality check last week. Turns out, Pyongyang’s definition of denuclearisation includes Washington disarming. Talk about a non-starter. The plot thickened further when Trump said Xi “could be influencing” Kim’s cold feet. It suggests that if next month’s summit in Singapore gets scrapped, it’s all Beijing’s fault. The same might be true even if a Trump-Kim meeting happens. The odds of Kim surrendering his nukes were minuscule even before Trump’s national security adviser, uber-hawk John Bolton, spouted off about a “Libya model.” Muammar Gaddafi’s fate after he scrapped his nuclear ambitions won’t appeal much to North Korea’s hereditary boss. Trump is almost sure to be disappointed by Kim’s follow-through on any Singapore pact – and, in his mind, Xi’s unwillingness to crack the whip. A Nobel Peace Prize for Trump? He deserves it more than many of the recipients Secondly, legal troubles in Washington. Trump’s Nobel ambition aims to eclipse and transcend the scandals, indictments and general chaos that are sure to colour his legacy. As the investigatory noose tightens and his legislative prospects dim, Trump is likely to resort to his greatest hits – China is “raping” American workers, “killing” jobs and it’s time to rumble. Nothing would excite Trump supporters ahead of congressional elections in November like body-slamming China. It also would change the subject from what’s almost sure to be a letdown on the North Korea front. That sure won’t win Trump any prizes with emerging-market investors, let alone the Nobel committee. But it’s important to look past today’s glimmer of optimism on trade. If there’s any pattern to the Trump White House, it’s that breaking deals – be they on trade, climate or Iran – comes more easily than forging them.