s not much more stimulation you can do. But you know, the problem here is not the U.S. economy. The reason the markets went crazy this week was because China put out a whole slew of data that showed the economy there is slowing, and Germany actually reported that its economy shrank a little bit in the second quarter of this year. So this is a global problem, not an American problem. But as I said, it washes onto our shores very quickly.
MR. COSTA: The global slowdown, an important point. What does your reporting reveal about that?
MS. MITCHELL: Well, the global slowdown is clearly, you know, the effect of a lot of things that have been building up and also this trade rhetoric and the tariffs from the president. Going against Canada, going against Mexico, he got what he wanted there in this new deal which hasn’t been ratified yet. But the fact is that he does not see the interconnections. And also, to bludgeon the Fed when, as Jerry points out, there’s – they don’t have a toolkit either anymore, really, given how historically low interest rates are. More stimulus right now would not really help, but the president doesn’t seem to understand that.
MS. BUMILLER: I mean, a lot of economists say that being tough on China is not a bad thing, that the Chinese do deserve some toughness, but the president has gone about it in a very peculiar way. Rather than, you know, marshalling out allies – Japan, South Korea, the Europeans – to build up a case against China, he has actually put tariffs on them. So it’s a very strange economic policy.
MR. COSTA: What kind of test, Elisabeth, is – are the Hong Kong protests for President Trump as he navigates a trade deal?
MS. BUMILLER: Well, this is actually sort of related to his trade war with China. The president is pretty much isolated in his – in his rhetoric right now on Hong Kong, which is very mild. He is not – he is not really supporting the protesters. He’s not denouncing the crackdown and the – and the – what the Chinese government is doing. He is out of step with both parties on the Hill, Republicans and Democrats, out of step with the allies, out of step with his own State Department. He’s even out of step with his most conservative advisors like John Bolton, who are – who are denouncing China for cracking down on freedom.
MR. COSTA: Is that because the president wants this trade deal? He looks at the market being a little uneasy this week, but on the horizon he sees a possible trade deal. Is it all about trying to lay off China, lay off President Xi Jinping of China to salvage a deal, whether it’s in the fall or the spring of 2020?
MR. OLORUNNIPA: Yeah, we’ve seen this president link trade to all kinds of other issues that other presidents haven’t done in the past – human rights abuses, protests, civil freedoms. This is a president who wants a deal with China and he doesn’t really see the value of interfering in another country’s matters, even if it is to stand up for human rights, if it’s not going to benefit him politically. So we may talk about him interfering with the Israeli elections and trying to bar American congresswomen from visiting Israel because he sees that as politically beneficial to him. Standing up for protesters in Hong Kong, he doesn’t necessarily see the political benefit for that. He does see the political benefit for getting a trade deal. So that’s part of the reason he’s not having sort of a strong voice standing up for human rights in China, instead hoping that he can get a trade deal and deal with the human rights issues later.
MR. COSTA: Vivid scenes in Hong Kong. What are Beijing’s options as they confront this crisis?
MS. MITCHELL: Beijing’s options they have preplanned. They’ve got staged in Shenzhen, as close as they could be to Hong Kong, military – you know, the army, the tanks are there. President Xi, according to all reporting – I’ve talked to officials here as well as in other capitals – President Xi does not want a crackdown. He does not want another Tiananmen. But he is setting the stage in case he has to, to reassert control, by defining the protesters as terrorists, by trying to whip up nationalist fervor against them. And in a controlled media – state media – he is trying to change the narrative, at least in the way this is being interpreted domestically.
And as far as President Trump is concerned, you’re absolutely right. And he’s linking trade and human rights in a way that is counterintuitive to our – to our culture, to Republican and Democratic presidents. It is really Trumpian for him to be hanging back and being so silent about this and silencing the State Department on human rights here. And it is similar to the way he has behaved in other settings with other totalitarian leaders, because he seems to have an affinity for strongmen.
MR. SEIB: I think it’s interesting to speculate how President Xi links these two issues – trade and Hong Kong. And it seems to me it could go either way. He could say, look, I’ve got problems here. Let’s do a trade deal and get that one off my plate. Or he could say: I need to be really tough here, and I have to show toughness right now, so I can’t be seen as conceding things to Donald Trump. And so that makes a trade deal less likely. I think it could go either way.
MR. COSTA: Economic questions are also confronting Democratic presidential candidates. For instance, Senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont have made it a keystone of their campaigns, calling for more regulation and taxes to reign in Wall Street. And in recent days at the Iowa State Fair Senator Cory Booker of New Jersey said this.
SENATOR CORY BOOKER (D-NJ): (From video.) This president has hurt farmers. This president has hurt our economy. This president has hurt working people because of these tariffs. Our trade policy will take on people like China, and we will win. We won’t just talk about it with bluster and tweeting.
MR. COSTA: As Alex Shephard wrote in The New Republic this week, Democrats have a difficult task in addressing the possibility of a recession. They cannot be seen as eager for economic pain. At the same time, there’s been a real reluctance to criticize the Obama administration’s legacy.
Toluse, how has the economy reshaped the Democratic race for president?
MR. OLORUNNIPA: Yeah, you’ve heard so many different Democratic candidates say that the economy isn’t working for everyday workers, even though, you know, there are strong numbers on unemployment, on GDP growth. They’re trying to paint this economy as being rigged against the working man and woman, basically saying that working families are not getting ahead in the Trump economy. They’re going against the tax cuts, which they say go disproportionately to the wealthy. They’re saying that corporate tax cuts help big corporations. You hear Elizabeth Warren speaking out much more fervently against big national – multinational corporations than any other candidate. And she’s getting some pickup from a lot of voters who do believe that the corporations are rigging the economy. And they say that Trump is helping the corporations, at the expense of everyday working people.
MR. COSTA: Does the – are the Times reporters picking up on a little bit of traction for the more populist Democrats, the democratic socialists, amid all this news?
MS. BUMILLER: Certainly. I mean, it’s interesting to think Cory Booker was talking about farmers. I mean, that’s one – that is – those are – they have really been hurt by Trump’s trade policies. And it was interesting, just this month the Farm Bureau put out a really, really tough statement about the trade war, and China’s decision not to – you know, not to accept exports – agricultural exports from the United States. And said: This is going to cost us $9 billion in this year, and that we’re going to lose all of that. So, yeah, there’s a – certainly there’s a lot of – among younger voters, Millennials, there’s a lot of – a lot of support for those kind of policies.
MR. COSTA: Is this field going to tighten? Former Colorado Governor John Hickenlooper decided to bow out of the presidential race this week. They’re clamoring for attention. Are we seeing a shrinking?
MS. MITCHELL: I think you’re going to see a shrinking from whoever does not get on that third debate stage. After that, it’s going to be time and people are going to start dropping out. But until they see whether or not they can find their way on through free media, through getting on shows, and finally, they hope, picking up in the polls, I don’t know how much room there will be for both Warren and Sanders. And, in fact, Warren’s organizing ability, her ground game in Iowa, in Nevada, is impressive. And her message on the economy sounds fresher. It’s tough and populist, but it sounds newer than Sanders’ does, which sounds as though it’s the same themes as 2016.
MR. SEIB: It does. She’s got a unified, cohesive theory of what