Say what you will, US President Trump is vigorously projecting what he believes are American interests. There is virtually no sign of the isolationism that many observers had anticipated. Indeed, as we have argued, the America First rejection of the League of Nations that Trump harkens back to was not isolationist as much as unilateralist. And the same is true of the Trump Administration.
He is trying to get North Korea to give up the nuclear weapon capability it has sought for a generation. Stopping Iran from acquiring nuclear weapons is not sufficient, he wants to reduce its ability to be a regional power.
It wants China, the world's second-largest economy at around $11.2 trillion to remake its economy and abandon one of President Xi's major initiatives, Made in China 2025. The US is seeking a $200 billion reduction (~2/3 by the US accounting) of China's bilateral surplus in two years, which is the equivalent of 1.7% of the PRC's GDP. The US has continued to ratchet up sanctions on Russian companies and individuals to express disapproval of Putin's foreign policy.
The Trump Administration is not content with aggressively pursuing America's traditional rivals. The re-assertion of US power has been directed at American allies, such as Europe, Japan, and Canada. Europe has been given another one-month exemption to the steel and aluminum tariffs, but this seems to be simply playing for time, Japan was not even given a temporary exemption in the first place.
Each disagreement is expressed in superlative terms, and few have been resolved. The US and South Korea reformed an existing free-trade agreement but the pressure the US was able to bring to bear may be not duplicated elsewhere. Some other countries have done the calculations and may be willing to accept quotas instead of tariffs on their steel and aluminum exports to the US.
The priorities of the Trump Administration are not clear. It seems to exaggerate its ability to dictate the outcome of events.Since it sees international relations as a dog-eat-dog world, there are no real allies. Transactional diplomacy yields more results than strategic posturing.
In the week ahead, three geopolitical and trade issues are high on the agenda. The post-mortem on the Sino-American trade talks will be provided. The US next steps will likely be clarified. Some are linking China's decision to cancel import commitments for soybeans for three consecutive weeks in April to the trend tensions. It might, though, at the same time, it may also be linked to China's decision announced at the end of last year, to tighten the quality standards of US soybean imports by reducing the amount of foreign materials in the shipments. Reports identify that the Chinese concern was over weed seeds.
Similarly, China's gradual decline of waste imports from the US, the UK, EU, and Japan also is also a source of tension. China announced last July as part of its efforts to reform its own environmental practices phase in a ban on imported garbage, scrap, and waste. China's solid waste imports (plastics, paper, and metal) fell 54% in Q1 18, in the immediate aftermath of the ban that went into effect at the start of the year. More items will be banned starting next year and the year after. It is not an unalloyed benefit for the Chinese environment as some producers will not be able to rely on foreign scrap, but in general, the motivation seems environmental and not trade per se.
