The announcement this week that U.S. President Donald Trump will face an impeachment inquiry led by House Democrats will greatly complicate Trump’s efforts to rewrite global trade agreements, experts say, as both his foreign counterparts and domestic political allies assess his chances of political survival.
“This is a giant cloud over the administration's ability both to conduct foreign affairs and to get legislation passed,” said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics.
An impeachment proceeding will likely dominate the attention of lawmakers in Washington, experts say, making it difficult to see how the administration’s trade initiatives that require congressional approval will get passed.
It will also set foreign governments — most notably China, which has another round of trade talks with the U.S. scheduled for next month — scrambling to assess the president’s chances of finishing out his current term, much less winning reelection in 2020.
How the situation will ultimately resolve itself remains so unclear that most experts contacted by VOA were unwilling to speculate.
Lester Ross, the partner-in-charge of the WilmerHale law firm’s offices in Beijing, said only, “Political vulnerability of the leader of any government is likely to weaken such leader and country’s diplomatic and negotiating leverage.”
Another trade attorney, asked what he thought the impact of an impeachment inquiry would be on the president’s multiple ongoing trade initiatives, responded by emailing a photograph of comedian and television star Larry David wearing his trademark look of utter bewilderment.
Democratic House Speaker Nancy Pelosi announced Tuesday she was launching a formal impeachment inquiry, after news broke that Trump had used a July phone call with newly elected Ukrainian President Volodymyr Zelenskiy to request that the government in Kyiv undertake an investigation into alleged corruption involving the son of former Vice President Joe Biden, a front-runner for the Democratic presidential nomination in 2020.
The furor only grew Wednesday, after the White House released a memorandum roughly outlining the contents of the conversation. The transcript confirmed that Trump had made the request in the context of a conversation about military assistance to Ukraine, which has been battling a Russian-backed insurrection in its eastern provinces, as well as Moscow’s invasion of the Crimean peninsula.
Trump pushes trade agenda
The uproar didn’t stop Trump from trying to make progress on his trade agenda. On the sidelines of the United Nations General Assembly in New York on Wednesday, he and Japanese Prime Minister Shinzo Abe signed an agreement that would lower Japanese agricultural tariffs and U.S. industrial tariffs, and establish new rules for digital trade between the two countries.
Speaking to reporters, U.S. Trade Representative Robert Lighthizer characterized the agreement as “hugely important, particularly for American agriculture and for digital farmers,” and said it vindicates the president’s approach of negotiating trade deals bilaterally, rather than joining multi-nation pacts.
The limited nature of the agreement, which was negotiated as a precursor to a larger deal, meant that it could take place without the approval of Congress. However, the impeachment proceeding makes the prospect of a larger deal, which would require lawmakers’ assent, less likely.
The looming impeachment inquiry might mean that the deal Trump inked with Abe is his last trade success for the foreseeable future.
His attempt to rewrite the North American Free Trade Agreement, which took the form of the U.S.-Mexico-Canada Agreement, or USMCA, has been hung up in the House of Representatives for months.
Lighthizer said failure to pass the bill would be a “catastrophe” for the U.S. economy, and expressed confidence that it would be enacted.
“On the merits, this is demonstrably good for the people of the United States. And I think, for that reason, it will pass,” he said. “I believe in the system, and I think we're going to have a bilateral win. And I think it's going to be good for the economy, for the American people, for Republicans, but also good for the Democrats.”
But its approval by Congress, already in question prior to Pelosi’s announcement of an impeachment inquiry, now looks more unlikely than ever. Trump admitted as much on Monday, saying to reporters in New York, “I don’t know that they’re ever going to get to a vote. I don’t think they can do any deals.”
Negotiations uncertain
By far the biggest question about the future of trade negotiations concerns China, which has been locked in an escalating trade war with the United States since spring 2018. Tit-for-tat tariff escalations have resulted in each country levying import taxes on hundreds of billions of dollars in trade goods.
In a speech to the U.N. on Tuesday, Trump did not moderate his position, describing Chinese trade practices in harsh language. He said that since being admitted to the World Trade Organization in 2001, “Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers, and the theft of intellectual property and also trade secrets on a grand scale.”
Trump’s strategy in imposing an escalating series of tariffs has been to force China to the negotiating table in a weakened position, hoping to wring concessions from Beijing. But the specter of impeachment, experts said, will force Chinese leaders to reassess both Trump’s ability to follow through on future threats and the viability of any deals struck with a leader who may not be in office much longer.
With Republicans in control of the Senate, the prospects of Trump actually being ousted in an impeachment trial are highly unlikely. Yet there is no way of knowing how an impeachment proceeding will impact the outcome of the 2020 presidential election.
“Their question will be, ‘If we do a deal with Trump, will the new administration led by a Democrat — if a Democrat is elected — then just want to come back to the table with more demands?’” Hufbauer said. “And if that's going to be the prospect, why not just hold off the big concessions until 2021?”
Lighthizer, while expressing optimism Wednesday about upcoming talks with China, seemed to concede that continuation of the status quo is both a possibility and an outcome that the administration wouldn’t regret.
“My instructions are, 'If you can get a great deal for the American people, do it. If you can’t, we have a perfectly adequate situation,'” he said.
Hufbauer, who recently traveled to China and will be returning there next month, said that he believes Chinese officials were already “resigned” to the idea that there would be no settlement of the trade fight in the near term.
“I think their goal is to keep it from getting worse,” he said.
Trump’s moves on trade have been unpredictable in the past, and it’s far from clear whether he will see more benefit in further disrupting trade relations with China or in easing them.
Hufbauer said he sees at least the possibility that circumstances will lead both Trump and China to see benefit in some sort of de-escalation.
“Some gestures in October are certainly possible, but they would be modest gestures,” he said. “I would not rule out that he, in this October meeting, pulls out some olive branches, and that the Chinese pull out some olive branches.”
