From China to Mexico, Trump trying to break trend ahead of 2020 election

US President Donald Trump has increased push to strike "fair" deals and has threatened hefty tariffs to various countries across the world in this process.

The mounting trade tensions between the United States and China could hit the rest of the world harder than ever and just as world leaders were struggling to evaluate the impact of this trade war, the US increased pressure on Mexico in recent days with US President Donald Trump threatening hefty tariffs if it fails to tackle the flow of immigrants. Although the imminent threat is called off after the US and Mexico reached an agreement before tariffs could kick in, Trump has maintained that he will not hold back in imposing tariffs if he feels Mexico is not sticking to their part of the agreement.

All this comes in the backdrop of the US trying to strike "fair" deals with all the countries, big and small. Trump has irked the whole EU, India, Turkey among other countries as he tries to make deals largely in his favour. 

The US is also particularly concerned about the increasing influence of China over the world evident by Trump's strengthened stance to deal with the disturbed relations with countries like Iran and Venezuela.

Highlights of US stance in 2019

• US concern over 'predatory' Chinese debts

China has granted huge loans to various countries, sometimes so big that these countries are not able to pay back. One such example is Sri Lanka, which had to grant China a 99-year lease and 70 percent stake in its deep-water port as it was not able to pay back the loan to China. China has also granted huge loans to other countries such as Djibouti, Ecuador, Argentina, Pakistan, and the debt is as high as 80 percent of the GDP which the US feels will ultimately lead to Beijing using them.

• US-China trade negotiations

Trade negotiations went well for weeks, and global stock markets were blooming with the optimism of both sides but last month China suggested systematic edits to a nearly 150-page draft trade agreement, which the US says undermined its core demands and the trade tensions which were ongoing from more than a year hit its worst stage.

• Huawei outrage

The US government in May this year prohibited American companies from selling US-made components to Chinese major Huawei which the later needs for its equipment. A 90-day reprieve was later granted to allow for the ban to be phased in. That measure could threaten the survival of Huawei, one of China's corporate champions, according to experts who underline its reliance on American electronic parts.

• Iran episode and the damage

The US has been increasing pressure on Iran from quite some time when it pulled out of the 2015 nuclear deal and the situation is nearing a war as Washington has significantly increased military presence in the region. The US also imposed sanctions on Iran, which were subdued by temporary waivers for some countries but it resulted in significant volatility in oil markets.

Oil price soared during the August-October period and have settled down in recent times. But some sharp spikes are seen in markets as tensions escalate in the Gulf region.

• Mexico and the immigrant's impact on trade

Trump recently sparked concerns over Mexico when he threatened hefty tariffs if Mexico fails to curb the immigrant flow. But major US automakers were also losing sleep because their cost-efficient production setups were in Mexico and were at risk. The US eventually agreed to a deal with Mexico and Trump announced the indefinite suspension of tariffs but the threat still remains as the agreement itself is shadowed by controversies.

• Trump takes up trade imbalance issues with allies

The US also seeks to balance out trade issues with strategic allies like EU and India. During Trump's latest visit to the UK, he and PM May talked about the trade issues and made a public statement about how the negotiations will go ahead.

US has also withdrawn GSP benefits from India, under which Washington allowed duty-free imports of a pre-defined list of products. India has warned a counteraction but delaying it from the past few months.

What's at stake?

US economy grew at a moderate pace of growth in the first quarter, dispelling earlier fears of a recession even though activity was driven by temporary factors. But the optimism was soon crashed when US manufacturing data indicated a slowdown in demand of US-made capital goods and weak employment data added to the woes of Americans.

Going by a number of surveys and interviews of industrialists, the trade war has hampered the business. US Federal Reserve policymakers have hinted they would be ready to cut interest rates and the European Central Bank opened the door to more stimulus if needed.

It's not only just American and Chinese economies, but global growth at the most basic level is also at stake. At the ongoing G20 summit, Finance ministers and central bank governors of member countries expressed concern about the risk possessed by "intensified" trade and geopolitical tensions.

"Global growth appears to be stabilizing and is generally projected to pick up moderately later this year and into 2020," the G20 finance leaders said in a communique issued after the meeting. "However, growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks, and stand ready to take further action," the communique said.

The International Monetary Fund has also warned that current high tariffs and possibilities of further hikes in the wake of threats by both China and the US could cut global economic output by 0.5 percent in 2020. IMF Managing Director Christine Lagarde had told media that while there was no imminent threat of a global recession, such tariff threats and trade wars were "self-inflicted wounds" that must be avoided.

Situation at home

Trump believes that the US has extended benefits to other countries to an extent that it is unfair to Americans. He has changed a lot of policies adopted by earlier administrations since taking over the presidency. He has vowed to put "America first" and a lot is at stake for him as he eyes another presidential run by winning 2020 election.

Trump will be formally launching his 2020 re-election campaign on June 18 in Florida, where he would hold a rally with his wife, Melania, Vice President Mike Pence and Pence's wife Karen at the 20,000-seat Amway Center in Orlando, Florida. 

Trump's polarizing presidency has given hope to a host of Democrats that one of them can deny him a second term. Republican strategists see Democratic front-runner Joe Biden posing a problem for Trump in the Midwestern swing states, and Trump has attacked Biden with a "Sleepy Joe" nickname.

Despite an impeachment demand hanging over his head, Trump still has a strong influence, evident by the fact that as much as 23 Democrats have launched their presidential bids but Trump confidently remains the face of Republicans with just one candidate, William F. Weld, planning to run against Trump for the Republican candidature.

Much of Trump's influence comes from rural areas. Most of the cameras and global media focused on the shine of big cities while rural Americans felt ignored but when Trump unveiled his campaign for the 2016 election, he largely focused on rural Americans, vowed to tackle the most important issues they faced. Be it immigrants stealing their jobs, or trade imbalances dragging down demand for their crop produce, Trump promised to tackle it all and rural Americans felt heard.

Trump might be struggling to get his approval rating up in the urban US due to his controversial stance on a lot of issues important to liberals but he is the hero among rural Americans. With more than a year left and key candidates still saving their key cards up their sleeves, it's hard to say who will become the next President, but Trump seems to have the odds in his favour and the recent deal, where Mexico agreed to buy more agricultural products from the US, and all other trade negotiations just add a cherry to Trump's cake.