Can Donald Trump’s ‘bully diplomacy’ resolve real problems with China’s trade practices?

It is not yet clear how the current trade dispute between the United States and China will play out. It could develop into a full-scale trade war, or it might be resolved by negotiations that address serious long-term problems in the relationship. The uncertainty stems in part from President Donald Trump’s capriciousness, also from the heightened risk that every conflict produces.

By now Trump has begun to build up an initial track record of “bully diplomacy”, especially in the field of nuclear weapons proliferation. After threatening North Korea with “fire and fury”, Trump has brought Kim Jong-un to the negotiating table, and is now trying the same tactic on Iran.

Economic disputes are receiving the same treatment. In the case of the European Union, Trump switched almost instantly from branding it as a “foe” in mid-July to announcing a deal with it less than two weeks later. As with North Korea, the details are still to be signed, and could well involve a return in practice to Obama-era policies. In the case of the EU, this could mean a reopening of negotiations on the Transatlantic Trade and Investment Partnership – or the same thing under a different name.

Trump’s characterisation of the US’ trade relationship with other countries is based on ignorance and economic illiteracy, which should be surprising in a Wharton graduate. His quack nostrums on trade flow from the mercantilism of English economists like Thomas Mun, whose books on the subject were published nearly four centuries ago. Mun, a successful merchant and a director of the East India Company, argued that England’s wealth would be increased by promoting exports and curbing imports to create a positive balance of trade.