Trump pulls China into the election

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In the Market Blog this time attention is paid to the pressure cooker in which the US and China have ended up together. The conflict casts its long shadow ahead to the presidential elections of November this year. According to analysts, these elections in the United States will be the ‘China elections’.

Until the first quarter of this year there seemed to be no problem for President Trump to be re-elected this fall. He could rely on almost full employment, all-time high rates, weak Democratic opposing candidates and no bloody conflicts in the world where U.S. soldiers are losing their lives.

But the corona crisis is an ”perfect storm” for the president. Trump is accused of underestimating the outbreak and doing a disastrous job of crisis management. Almost simultaneously with this increasing criticism of him personally, his criticism of China is becoming sharper and sharper. Does one have to do with the other? Yes, certainly.

Pearl Harbor

Trump wouldn’t be Trump if he didn’t take a chance in this crisis. Last week he launched a frontal attack on China, comparing the spread of the coronavirus with the attacks on Pearl Harbor in 1941 and on the World Trade Center in 2001 – both of which led to wars. Trump says he has ‘convincing proof’ that the virus comes from a laboratory in Wuhan – proof that it’s classified, and he’s not allowed to share.

Trump now warns that he wants to cancel the January trade agreement with China, and he is giving dangerous shots to the financial markets by prohibiting a U.S. civil servant pension fund to invest in an index fund with exposure to Chinese equities.

His attack last week takes place against the backdrop of a recently published poll by Pew Research Center. It shows that the view of the American population towards the People’s Republic of China and its leaders has been the worst since the research institute explicit started asking about the relationship with China in its survey in 2005. At the same time, the picture has reached a low point since President Trump began his trade battle with China in 2018.

Patriotism reigns supreme

President Trump’s own rhetoric of ”America First” and China as a cheater since 2016 is now paying off, as Pew Research Center’s research results show: the population sees America as a leading power in the world with the highest percentage ever.

That patriotism and positive self-image are in stark contrast to the reality of a China that is already out of the (corona) crisis and growing again, while the US has almost 40 million unemployed, is running the money presses at full speed and has lost much of its ”soft power” in the world because of its ”America First”.

But Trump knows how to turn his disadvantage into an advantage. This can be done against the background that Americans are concerned about China’s trade surplus with the US, its environmental pollution, its violation of human rights and its alleged cyber-attacks and interference in the US elections. Trump says that China is trying to prevent him from being re-elected, which strongly contradicts the Chinese government.

“No profile without enemies”

While Trump tries to portray himself as ”the tough on China President”, his campaign leadership has already launched an attack on the Democratic opposing candidate Joe Biden, who is portrayed in commercials as ”Beijing Biden”.

It raises the question whether Donald Trump has sometimes read the books of the German political philosopher Carl Schmidt, who has said, among other things, that ‘politics is the distinction between friend and foe’ and that ‘you have no profile without enemies’.  Probably not, the natural talent had already come up with that himself. 

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