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Will investors tolerate personal politics infecting U.S.-China trade talks?

In this April 7, 2017, file photo, U.S. President Donald Trump gestures as he and Chinese President Xi Jinping walk together after their meetings at Mar-a-Lago, in Palm Beach. “Successful and sustainable trade deals need to be founded upon solid economic principles, but they also need to be politically tolerable. Investors are growing more concerned the U.S.-China trade discussions increasingly are neither as another round of talks is scheduled in the week ahead.”
In this April 7, 2017, file photo, U.S. President Donald Trump gestures as he and Chinese President Xi Jinping walk together after their meetings at Mar-a-Lago, in Palm Beach. “Successful and sustainable trade deals need to be founded upon solid economic principles, but they also need to be politically tolerable. Investors are growing more concerned the U.S.-China trade discussions increasingly are neither as another round of talks is scheduled in the week ahead.” AP

Politics always has been present during trade talks. After all, any comprehensive trade deal a president and his negotiators strike with a partner has to be ratified by Congress.

Successful and sustainable trade deals need to be founded upon solid economic principles, but they also need to be politically tolerable. Investors are growing more concerned the U.S.-China trade discussions increasingly are neither as another round of talks is scheduled in the week ahead.

It has been more than a year of trading higher tariffs and tough talk between the two countries. Among the latest fronts to open in the trade war is Chinese stocks owned by American investors. The White House has considered kicking Chinese companies off American stock exchanges as a way to limit U.S. investment in China, according to Bloomberg. Stocks of dozens of Chinese firms trade on U.S. exchanges. U.S. investors have billions of dollars invested in them.

Despite many of President Donald Trump’s strong-arm tactics toward trade talks with China, there is merit to the underlying issues. Yes, American-listed Chinese companies should be subject to more disclosures. Yes, American intellectual property needs to be robustly protected in China.

And now the president has dangled former Vice President and Democratic presidential hopeful Joe Biden in front of the Chinese. On Thursday, President Trump said, “China should start an investigation into the Bidens.” He said he hadn’t asked China yet, “but it’s certainly something we should start thinking about.” Publicly encouraging another foreign power to investigate a political rival opens another front for impeachment supporters.

Was this an off-the-cuff remark? A coincidence with the trade talks? Or part of the president’s bargaining strategy in the days leading up to the trade negotiations? The president pledged not to take a “bad deal” or a “partial deal” with China.

Investors have grown accustomed to stomaching the president’s unpredictable predilections, but will they tolerate personal politics infecting the trade talks?

Tom Hudson hosts “The Sunshine Economy” on WLRN-FM, where he’s vice president of news. Twitter: @HudsonsView.

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