The Finance 202: Trump risks repeating Bush controversy with ZTE deal
Tory Newmyer
The Washington Post, May 29

“Trump on Friday announced he is letting ZTE ‘reopen’ in exchange for a fine and some governance changes as his administration prepares for trade talks with Beijing later this week. The move is drawing intense criticism from both parties on Capitol Hill.”

America Is Fumbling Its Most Important Relationship
James Fallows
The Atlantic, May 28

“China is an increasing problem for the United States. But the latest reactions and assumptions about China among America’s political-media leadership class hold every prospect of making China-related problems much worse. How can this be? It involves the familiar tension between short-term political shrewdness and longer-term strategic wisdom.”

“Handled right—or, in as error-minimizing a way as the governments of both countries more or less have handled it over the past four decades—this is a relationship that overall can be a force for greater prosperity, less environmental damage, and more diplomatic stability around the world. Handled wrong, it holds peril for everyone, in realms ranging from an accelerated arms race in Asia to hastened environmental disaster for the world as a whole.”

North Korea Nuclear Disarmament Could Take 15 Years, Expert Warns
William J. Broad, David E. Sanger
The New York Times, May 28

Despite President Trump’s demands of “rapid denuclearization,” Siegfried Hecker, a top federal government adviser and former director of the Los Alamos weapons laboratory in New Mexico, reports that North Korean disarmament could be a much longer process. Dr. Hecker, who has visited North Korea’s nuclear plants four times and is the only American scientist to see North Korea’s uranium enrichment facilities, released a report with two colleagues from Stanford’s Center for International Security and Cooperation detailing the necessary steps and timetables for denuclearization.

Hecker’s report documents three overlapping phases of a disarmament process that, in total, would require at least 10 years: “the initial phase, taking up to a year, is the halt of military, industrial and personnel operations. The second, taking up to five years, is the winding down of sites, facilities and weapons. The final and hardest phase, taking up to 10 years, is the elimination or limiting of factories and programs.”

Korea Summitry
Richard N. Haass
Foreign Affairs, May 25

“Incoming U.S. presidents enjoy a good deal of discretion, but they have no choice when it comes to the problems they inherit. You cannot pick your in-box, only what to do about it.”

“It was inevitable that the 45th president of the United States was going to face a North Korea that had accumulated a small arsenal of nuclear weapons, along with ballistic missiles able to carry them long distances. In the first year of Donald Trump’s presidency, Pyongyang made this reality abundantly clear by carrying out its sixth (and most powerful) nuclear test…”

Trump’s Gamble Hits Reality Check in North Korea Negotiations
David E. Sanger
The New York Times, May 25

“President Trump attempted a revolutionary approach to North Korea — a gamble that negotiating prowess and deal-making charm in a face-to-face meeting with Kim Jong-un could accomplish what no American president or diplomat had dared to attempt in the 65 years since an uneasy armistice settled over the Korean Peninsula.”

China won’t meet Trump’s $200 billion trade demand
Amitrajeet A. Batabyal
Inkstick Media, May 22

Despite Chinese leaders agreeing to US trade deficit reductions, economic realities make a reduction this large difficult to achieve. A deficit reduction could occur through decrease products sold by China to the US, or by an increase in products sold by the US to China. However, because American imports from China tend to be inexpensive, even a substantial decrease in reliance on Chinese goods would produce minimal decrease in deficit. Furthermore, the US economy has reached its production possibility frontier, thus limiting its ability to increase exports to China.

Energy exports to play ‘massive’ role in any breakthrough in the US-China trade talks
Tom DiChristopher
CNBC, May 21

“Energy will play a major role in a breakthrough in trade talks between the Trump administration and its Chinese counterparts, Treasury Secretary Steven Mnuchin told CNBC on Monday.”

“U.S. and Chinese trade negotiators agreed this weekend to put on hold tariffs that they have threatened against one another, after China agreed to purchase more American goods. The concession could move the needle on one of President Donald Trump’s major goals: reducing the U.S. trade deficit with China.”

“Oil and natural gas production is one area of the U.S. economy that is indeed booming. Meanwhile, China, the engine of the global economy, is hungry for more fossil fuels as more drivers take to the nation’s roads and the government seeks to generate more electric power from cleaner-burning natural gas.”

Trump-Kim Summit Changes China-U.S. Relationship
Sampson Oppedisano
China U.S. Focus, May 21

“In an effort to show their supposed commitment towards rebuilding relations, North Korea has made several gestures of good faith, including releasing three American prisoners, as well as promising to dismantle its nuclear test site this month. With the historic summit between the United States’ Donald Trump and North Korea’s Kim Jong Un set for June 12th in Singapore, a global audience will be watching, hoping that one of the most challenging security dilemmas in the world will finally come to an end.”

“Should the Trump-Kim summit in Singapore yield positive results, China risks losing North Korea as a check on the United States. Recently, Secretary of State Mike Pompeo indicated that once North Korea denuclearize, the United States would be able to send capital to develop the country’s infrastructure. This would allow the United States to exert more influence in the region. China knows better than anyone the leverage economic incentives gives, having used economic development initiatives to displace U.S. influence in the region.”

“China is likely to retain its control over North Korea. China has been one of the few countries to stand up for the Kim regime and advocate, if nothing else, for a diplomatic solution. In recent months, China has acted more as an intermediary between the United States and North Korea, demonstrating its desire for peace in the region, and assuming an important role on this key issue.”

Trump’s Charm and Threats May Not Be Working on China. Here’s Why.
Keith Bradsher
The New York Times, May 21

“China has called President Trump’s bluff. Chinese negotiators left Washington this weekend with a significant win: a willingness by the Trump administration to hold off for now on imposing tariffs on up to $150 billion in Chinese imports. China gave up little in return, spurning the administration’s nudges for a concrete commitment to buy more goods from the United States, and avoiding limits on its efforts to build new high-tech Chinese industries.”