WASHINGTON: President Donald Trump used his second State of the Union address to deliver a message of unity to the American people, effectively doubling down on his America First policy for a domestic audience.
Coming on the back of the reopening of the American government, this period of lull gave him the opportunity to urge national cohesion on a range of issues.
He included small conciliatory policy tokens to appeal to a broad audience of Americans including reducing the cost of healthcare and prescription drugs, a call for an end to the opioid crisis, veteran affairs reform, and criminal justice reform.
But his advocacy for more combative policies, including a vehement recommitment to building the wall and immigration, tighter abortion laws, and the US reciprocal trade act, were geared toward mobilising the republican base that could secure his re-election.
Interpretation of his articulation of American foreign policy towards Asia must take into account this fractured state of domestic politics. Trump will use foreign policy to project American strength to bolster his position at home.
PARTISAN DIFFERENCES WILL DIVERGE
Trump needs a win. In his 2018 SOTU, President Trump outlined a plan for immigration reform, but the resulting 2018 bill on border security and immigration failed passage in the House in June.
In a Republican-controlled Congress, the president was unable to secure passage for a bill concerning his signature policy issue, and now the Democrats have control of the House of Representatives.
Given his strong and unrelenting focus on immigration and wall-building in his address, Trump seems to have chosen the potential deal on government funding and the wall as the cause with which to prove he can and will win.
With this renewed and high-profile emphasis on immigration and the wall, the President has already shifted into 2020 campaign mode, with much of the speech aimed at re-energising his base.
His conjuring up of an image of American military and technological might in World War II and the Cold War by honouring D-day veterans and the second man to walk on the moon astronaut Buzz Aldrin was aimed at rallying this group.
Although Trump repeatedly called for non-partisanship, the reality is that partisan differences on foreign policy will only increase as Democratic primary candidates navigate their foreign policy platforms, which may result in heightened partisan contention in the short term.
Even republicans in Congress privately expressed discontent as the President derides the US intelligence community and refuses to listen or even discuss major policy decisions with military leaders, such as troop drawdowns in Syria and Afghanistan.
REVERSING DECADES OF CALAMITOUS TRADE POLICIES
So it is no surprise Trump framed his mention of China in the context of America winning to become the “hottest economy anywhere in the world“, with the creation of 5.3 million jobs, more people working than at any time in US history and with the fastest rising wages in decades – amid his efforts to reverse decades past administrations’ “calamitous trade policies”.
Trump said his administration has made clear to the Chinese that after years of China’s targeting American industries, and stealing intellectual property, the theft of American jobs and wealth has come to an end.
He highlighted the imposed tariffs on US$250 billion of Chinese goods, suggested the US Treasury "is receiving billions of dollars a month from a country that never gave us a dime” and pointed to an increase in federal tariff revenues as a bonus for the nation.
But is that really so? The New York Times fact checker put this increase at US$13 billion by the third quarter of 2018 - a number that can also be interpreted as the unnecessary premium paid by US consumers as producers pass on the higher cost of imports.
In addition, he referred to “another historic trade blunder was the catastrophe known as NAFTA” and said the new US-Mexico-Canada Agreement would bring back manufacturing jobs, expand US agriculture, protect intellectual property, and ensure more cars are made in America.
He also called for passage of the US Reciprocal Trade Act, which if another country places an unfair tariff on an American product, would allow the US to charge the other country the same exact tariff on the same product they sell.
No doubt trade will remain a hot-button issue from now until the 2020 presidential election, and any trade negotiation will come under huge scrutiny.
CHINA TRADE ON OUR MINDS BUT NOT ON THE PRESIDENT’S
With less than a month before the “trade truce” between the US and China is slated to end, Trump had to mention the ongoing negotiations between the two countries in his address.
His remarks mirrored talking points of the US negotiating team, but the commitments the US is looking for from China that he articulates are very different: A new trade deal with China must “include real structural change to end unfair trade practices, reduce the trade deficit, and protect American jobs.”
This is a tall order, and to fill it would require much work to do before Mar 1, not to mention the uncertainty over whether these deep structural changes from China can be enacted so soon even if the Chinese government agrees.
And, as former Democrat candidate for the Georgia governor position Stacy Abrams noted in her rebuttal to the State of the Union address, it is the lunar new year holiday season in China, throwing an extra time crunch on the timeline for negotiating teams on both sides.
We expect Trump will agree to a limited deal by the deadline, or a deadline extension, that would preserve the current tariffs without further escalation and allow time for the US negotiating team to reach a more comprehensive deal that includes some structural reform, with enforcement mechanisms.
The President again mentioned his great respect for President Xi in the context of negotiating a deal with China, so we expect a deal, if one is reached, to be announced after the two presidents meet in person prior to or around the Mar 1 deadline.
A SECOND MEETING WITH NORTH KOREA’S KIM JONG UN
Significant to Asia also is Trump’s announcement he would meet North Korean Chairman Kim Jong Un in Vietnam on Feb 27 to 28. Trump did not elaborate on the significance of this announcement, and he didn’t need to.
A year ago, Trump’s foreign policy language in his State of the Union addressed featured strong messaging on North Korea, which he personalised by telling the story of a North Korean defector. The message was overwhelmingly one of freedom and triumph over evil.
The Trump administration turned this message on its head soon after with engagement of the Kim regime, which reached its peak in June of that year with the Trump-Kim summit in Singapore.
Today, with his second summit with Kim confirmed for this month in Vietnam, Trump and his administration have undoubtedly reduced tensions between North Korea and the region. However, the issue of denuclearisation and countless hours of hard work still stand between Trump and a “win,” regardless of the number of summits his administration convenes.
We expect the meeting to take place as promised, with pomp and circumstance accompanying, but we do not expect an announcement of tangible progress on denuclearisation to result from the summit.
Even that would be a small victory for Trump. Two historic meetings with North Korea under his belt is something no other US president can claim.
FOCUS ON 2020 ELECTIONS
Overall, Trump’s State of the Union had, expectedly, a domestic focus, with the only specific mentions of Asia being his trip to Vietnam and to China.
Trump has been keen to portray himself as the only one who can resolve the nuclear crisis with North Korea, or rebalance the US’ trade relationship with China by reducing cyber theft, forced technology transfer, and negotiate fundamental structural reform to ease the ever increasing deficit.
Because he heavily campaigned on how the foreigners were taking advantage of America, Trump will be keen in the lead-up to the 2020 election to take actions that portray his administration as the only one willing to stand up for American jobs and level the playing field in a bid to live up to his America First policy.
Tami Overby is a Senior Director at McLarty Associates and former SVP of Asia for the US Chamber of Commerce. Rosalind Reischer is a Senior Associate with McLarty Associates’ Asia practice.