Trumps Flips on Russia and China

President Trump appears to have undergone an economic and political conversion as his list of allies realigns. In a statement that contrasted the tone of his campaign, Trump said he no longer considered China to be a currency manipulator. Political analysts suggest that this change comes as Trump seeks help from China to rein in North Korea, while simultaneously distancing himself from Russia following their support of Syria, and charges that Russian hackers interfered with the American elections.

Trump abandons Putin to pursue relations with China.

Trump Turns to China for Help with North Korea

Trump explained his new stance on China to the Wall Street Journal, noting that his recent meeting with President Xi Jinping had led to a new understanding regarding the partnership between the two countries. He also gained a new understanding of the difficulties China faced in dealing with North Korea’s threat of nuclear weapons. The new stance reduces fears that the situation between America and China will escalate into a full scale trade war.

Putin’s Defense of Syria Threatens Relations with U.S.

On the other hand, relations with Russia appear to be headed for a new low since the fall of the Soviet Union. Trump noted that “We’re not getting along with Russia at all,” in reference to Russia’s veto of a UN resolution condemning Syria’s use of chemical weapons on civilians. Putin’s continued defense of Syrian President Bashar al-Assad led to a tension filled meeting with Secretary of State Rex Tillerson. After two hours, there was little agreement on any of the issues discussed, which included Syria, Ukraine, and North Korea.

Russia Turns from Friend to Foe

The new situation represents a complete flip from the early days of the Trump administration, when critics were accusing Trump and Putin of engaging in secret negotiations prior to Trump’s inauguration. Several top presidential advisors admitted to meeting with Russian diplomats, and National Security Advisor Michael Flynn was forced to step down after giving evasive statements about his relationship with a Russian Ambassador. In a recent statement, the FBI admitted to investigating senior Trump advisor Carter Page to see if he was working with the Russians.

Trump Softens Stance on Chinese Trade

Earlier this year, China and America were fighting over trade, with President Trump suggesting a tax on imports from the Asian manufacturing powerhouse. At the end of 2016, the U.S. placed China’s major e-commerce hub Alibaba on the Notorious Markets list. This singles out retailers who deal in counterfeit merchandise. The turning point in Trump’s behavior towards China seems to have come in March. This was slightly after the resolution of his long time trademark dispute with the country, resulting in the approval of over 30 licensing agreements.

China Refuses North Korean Coal Due to UN Ban

China seems to be working to with the White House to calm down the situation in the Korean peninsula. This week, China refused a shipment of coal as part of a new ban protesting Kim Jong-Un’s ongoing nuclear weapons tests. The UN drafted the sanctions in November.  China buys almost a third of the exports which leave North Korea. Since January, China has purchased less than half of the tonnage of coal delivered over the same period in 2016.

Trade Negotiations Depend on Chinese Cooperation

In a press conference on Wednesday, Trump said he would be willing to consider renegotiating trade deals with China in return for their help in managing North Korea’s weapons program. In response, North Korea said that China was being inhumane, and “dancing to the tune of the US”. Despite the increasing cooperation, Secretary of State Tillerson made clear that if China was unable to keep Kim Jong-Un in line, America was willing to act unilaterally, as it had in Syria, when the President ordered a strike against the airfield from where Syria launched its Sarin attack.

How Do the Relationships Between China, Russia, and America Affect Trading?

Given the state of the global economy, a partnership with China is much better for American jobs than maintaining good relations with Russia. Many U.S. businesses rely on Chinese imports to keep costs low, and President Xi has pledged to lessen the protectionism which has kept American goods out of Chinese markets. This new situation should lead to the rise of the dollar. However the uncertainty between the new statuses could send investors running to gold as a safe haven.