Trump: On second thought, China isn't a currency manipulator and I like the Ex-Im Bank

Are we sure that Trump’s going to end up having to fire Steve Bannon? Between this and the Syria bombing, the nationalists in the White House may just up and quit.

If you think these broken promises are big news, wait until Trump comes out in favor of TPP.

Mr. Trump said the reason he has changed his mind on one of his signature campaign promises is that China hasn’t been manipulating its currency for months and because taking the step now could jeopardize his talks with Beijing on confronting the threat of North Korea.

“They’re not currency manipulators,” Mr. Trump said…

Mr. Trump also made a full reversal from the campaign by stating his support for the U.S. Export-Import Bank. The president said he planned to fill two vacancies on the bank’s board, which has been effectively paralyzed with three open seats on its five-member board…

“Instinctively, you would say, ‘Isn’t that a ridiculous thing,’ ” Mr. Trump said of the Ex-Im Bank. “But actually, it’s a very good thing. And it actually makes money, it could make a lot of money.”

He also said, contra his previous inclinations, that he might not replace Janet Yellen as head of the Fed. Then he said that Angela Merkel has become his favorite world leader (“great chemistry”) and mentioned that he’s looking forward to attending Davos next year with Jared and Ivanka. Then, when asked about health care, he said that a public option is “on the table.”

Only one of those things is true, actually, but they all seem sort of plausible at this point given his rate of ideological change. I’ll let you read the interview to find out which is the real Trump talking point. Suffice it to say, the shift on China is the policy equivalent of Jared Kushner and the “Democrats” inside the White House dunking in Steve Bannon’s face. Pity poor Peter Navarro, a longtime China-hater who was brought in to lead Trump’s National Trade Council and ostensibly to help direct a future trade war, now finding himself stuck with presidential comments like today’s. Why, it was just four months ago that Trump was tweeting things like this:

And, er, it was just 10 days ago that he was calling China the “world champions” of currency manipulation in an interview with the Financial Times. Now he’s defending them. What gives? Two things. One: Er, he’s right. China isn’t manipulating its currency. It used to drive down the value of the yuan to make Chinese goods cheaper for U.S. consumers but in recent years it’s been propping the yuan up. He has the facts on his side now. And even if he did want to brand China a currency manipulator, that’s supposed to trigger a year-long negotiation process to resolve the issue. Steve Mnuchin affirmed in February that the U.S. would follow traditional review procedures in assessing Chinese practices with its currency, not have Trump jump out there in front of a mic and pronounce them currency manipulators on day one, as he often threatened to do as a candidate. The administration’s been inching away from his campaign rhetoric for awhile.

There’s a more pressing reason why he’s backing off China, though. He needs China’s help on North Korea — and he’s getting it, somewhat. After the Financial Times interview, he huddled with Xi Jinping at Mar-a-Lago; a week later, China decided to reject shipments of coal from North Korea and to place orders with the United States instead. Today Trump repaid the kindness by dropping his “currency manipulator” rhetoric. He needs Chinese cooperation to pressure the NorKs so he’s pursuing Chinese cooperation. This is why, in fact, I thought his early phone call with the president of Taiwan was an odd bit of tone-setting antagonism. Yeah, granted, he wanted to send a message that he’d be tougher on China than Obama was, but North Korea was already America’s most pressing national security problem on election day. Obama warned Trump about it explicitly in their Oval Office meeting in the days afterward. China is one of the few non-military levers of power over the Kim regime, so why would he risk giving up that lever with an early Taiwan gambit? And sure enough, Trump eventually retreated and agreed to recognize Beijing’s “One China” policy towards Taiwan. Now he’s gone a step further and retreated from a trade war. It’s sensible, but must be deeply confusing to his populist blue-collar supporters.

Oh well. At least you’ve still got the wall, and a national deportation force. Maybe.