Friday October 18, 2019

Six Months of President Trump’s China Policies

July 14, 2017

President_Trump_with_President_Xi,_April_2017_Cropped

President Trump and President Xi at Mar-a-Lago, April 2017 (Source: Wikimedia Commons)

While many had grown familiar with President Obama’s defined Pivot to Asia policy, President Trump’s China policy has been far less clear and his positions on China have changed dramatically since the campaign trail. This is not unexpected. Campaign rhetoric against China is often more harsh than the president’s actual policies. During Bill Clinton’s campaign, for example, he was highly critical of China for its lack of progress on human rights. He went so far as to refer to Chinese generals involved in the Tiananmen Square incident as the “Butchers of Beijing.” However, in May 1994, President Clinton changed course on China and renewed its Most Favored Nation status despite human rights issues. President Trump promised to label China a “currency manipulator” many times during his campaign trail. He changed this stance in April 2017, tweeting, “Why would I call China a currency manipulator when they are working with us on the North Korean problem? We will see what happens!” It is normal for presidents to moderate their stance on China once they are in office.

President Trump’s long-term goals in the region have yet to be defined. President Obama’s policies in Asia were clear and his priorities, such as the environment, were well understood. Once taking office, the Trump administration has endeavored to decide on a framework to use for engaging with China on shared issues. This framework has seen some success in regards to trade, but President Trump has become less willing to cooperate with China due to his frustration with China’s efforts on North Korea.

North Korea as the Lynch-pin of U.S.-China Relations

President Trump approached the April 2017 Mar-a-Lago meeting with President Xi as an opportunity to create a personal relationship with China’s leader. This meeting was not an official state visit and had an informal atmosphere. The relaxed setting of the Mar-a-Lago resort allowed the two leaders to form personal ties. President Trump reported that “Tremendousgoodwill and friendship was formed, but only time will tell on trade.” The two leaders discussed a variety of shared issues, in particular trade and North Korea. President Trump later tweeted that he “explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korean problem! ” Despite initial ideas that Trump was trying to create a relationship based on personal leader-to-leader ties, this comment, as well as later emphasis on North Korea, shifted the focus. North Korea quickly seemed to become the lynch-pin in the U.S.-China relationship. Cooperation, or lack thereof, on this issue would ultimately affect their broader relationship.

The Trump administration has been consistent in identifying North Korean weapons development as a threat to U.S. security. Secretary of State Rex Tillerson, has warned that “the United States might be forced to take pre-emptive military action if the North Koreans “elevate the threat of their weapons program” to an unacceptable level.” At their Mar-a-Lago meeting, President Trump told President Xi the U.S. is “prepared to chart [their] own course” if China is unable to coordinate with the U.S. on resolving the issue of a nuclear North Korea.

There was some initial success with China’s cooperation on the North Korean issue. In early June 2017, the Trump administration worked with China to enact additional UN sanctions on North Korea. These new UN sanctions consist of asset freezes and travel bans for fourteen North Korean individuals and asset freezes for four North Korean entities. Beyond these additional sanctions, President Trump has been left unsatisfied with China’s efforts reigning in North Korean weapons development.

It is clear that the Trump administration had high hopes for China’s role in restricting North Korean weapons development. Secretary Tillerson stated that the administration is “asking a lot of the Chinese … in the past, the assumption has been the Chinese would only take limited action. We’re going to test that assumption.” President Trump publically touted his faith in China’s efforts. In April 2017, President Trump tweeted his “great confidence” in China to “properly deal with North Korea.” Later, on May 29, President Trump tweeted that “China is trying hard” to contain North Korean weapons development. However, by late June, President Trump had begun to express his disappointment with China’s efforts.

President Trump gave China an impossible request and put them in a situation in which they could not, and would not, meet his expectations. China does not have the same leverage with Kim Jong Un as they enjoyed with his predecessors. There is not a close relationship between leadership – Xi and Un have never actually met in person. China, arguably, does not have the necessary power or leverage to influence Un. Even if China could exert the necessary pressure on North Korea, there is no guarantee China would see these actions as in their best interest. China is primarily concerned with stability on the Korean peninsula and is unlikely to take steps that would majorly affect the strength of the Kim regime. A collapsed North Korea would bring unrest, refugees, and potentially even U.S. backed South Korean troops directly to China’s border. The U.S. does not share these same concerns. It is possible President Trump made these requests of China looking for an excuse to later express dissatisfaction with China’s lack of cooperation, allowing him to make the argument for unilateral action. However, it could be that President Trump simply did not understand China’s limitations and priorities in the region and unintentionally made impossible requests.

The U.S. has begun to take more unilateral actions on North Korea due to Trump’s dissatisfaction with China’s efforts. The U.S. Treasury announced secondary sanctions on June 29 targeting two Chinese individuals, a bank, and a shipping company. These sanctions represent a shift in the Trump administration’s policy from cooperation with China to unilateral action. U.S. Ambassador to the UN, Nikki Haley, has stated that U.S. military action in response to North Korean weapons development remains on the table.

Effects on the Broader Relationship

President Trump has also indicated he’s considering adjustments to his trade policies. Following North Korea’s July 3 ICBM test, President Trump expressed his frustration with China through a series of tweets. President Trump also conveyed his intentions to refocus on trade imbalances because of China’s lack of cooperation on North Korea. Trump’s administration had previously put aside trade issues in an attempt to assure China would continue to assist on North Korea. In addition to President Trump publically stating his frustration with China, the administration has begun to take more provocative actions.

The state of affairs in the South China Sea has not been a focus of the Trump administration, but no moves to pull out of the region have been made. The situation with North Korea has taken higher priority. Experts quoted by the Financial Times described the lack of a response from the Trump administration on continued build up in the South China Sea as giving China “a relatively free pass to maximize the chances it will boost pressure on North Korea to give up its nuclear program.” This issue may be reprioritized due to President Trump’s dissatisfaction with China efforts on North Korea. In May 2017, the Trump administration conducted their first right of navigation exercise around Chinese claimed territory in the South China Sea. Exercises have continued as recently as July 7, 2017.

In December 2016, before officially taking office, President Trump incited controversy with China by taking a phone call with Taiwanese president Tsai Ing-wen. This riled Chinese officials because this exchange between the leaders of the U.S. and Taiwan threatened the longstanding one-China policy. President Trump first publically stated that the U.S. may not hold to the one-China policy unless Beijing made concessions on trade. Later, during a phone call in February 2017, President Trump reassured Chinese President Xi Jinping that his administration would be adhering to the traditional U.S.-China framework. The Trump administration put aside the Taiwan issue until President Trump became dissatisfied with China’s efforts on North Korea. On June 29, 2017, the administration announced a $1.4 billion weapons deal with Taiwan. This was a deal brokered during the Obama administration, but was completed at a significant time for U.S.-China relations.

The U.S.-China Trade Relationship

President Trump pulled out of the Trans-Pacific Partnership shortly after entering office. This legislation would have given the U.S. and its 11 partner nations a great deal of power in defining trade relations in Asia. However, without that bargaining power, the U.S. must now approach China as an individual nation. China is strengthening its own trade position as it develops One Belt One Road (OBOR). This initiative is helping China expand its trade influence across Asia and into eastern Europe, challenging the U.S.’s hold on these markets. President Trump had done little else to define U.S. trade policies until meeting with President Xi in Mar-a-Lago. During this meeting, a “100-Day Plan” was created to address trade relations as a part of the new “U.S.-China Comprehensive Dialogue.” This plan was ambitious, but represented a positive start on addressing issues.

Based on a report released by the U.S. Department of Commerce from May 11, 2017, the new trade dialogue has seen some success thus far. China opened its markets to American beef in July 2017. The U.S. in turn began accepting imports of “China origin cooked poultry.” China and the U.S. have also agreed to several measures that will allow U.S. financial institutions more access to Chinese markets. The U.S. agreed to attend meetings on China’s OBOR initiative and in turn the U.S invited Chinese investors to attend the SelectUSA Investment Summit. Trump’s “100-Day Plan” has encouraged reciprocal market access with China. Trump campaigned on the belief that a trade imbalance with China is detrimental to the U.S. economy. However, Trump’s trade policies with China have not reflected the tough platform from his campaign.

As President Trump toughens his stance on China there may be some changes in his approach to trade policies. Some U.S. businesses are not satisfied with President Trump’s efforts on trade thus far. China continues to use its policies to protect domestic companies from international competition. The American Chamber of Commerce in Shanghai reported that “There is a growing asymmetry between the access that Chinese companies enjoy in other markets and the access foreign companies have in China.” While President Trump’s 100-Day Plan sought to open markets in China, a tougher stance may lead instead to restricting American markets. Some businesses are lobbying the Trump administration to subject Chinese investors in the U.S. to restrictions similar to the ones U.S. businesses face in China. President Trump may do this by expanding the power of the Committee on Foreign Investment in the United States.

 

Countries around the world are increasing their cooperation with China. Some are accomplishing this through the OBOR initiative. Others are using cooperative security efforts, like China’s new military base in the Horn of Africa. During the G20 summit in July, President Xi Jinping continued to improve relations with many world leaders. On July 4, two days prior to the summit, a German engineering company announced a large sale of aircraft to a Chinese state-owned enterprise. During the summit President Xi met with Japanese Prime Minister Shinzo Abe to discuss security concerns regarding North Korea. This meeting was a result of months of efforts to strengthen their relationship. The U.S. should follow Japan and Germany’s examples and seek to work with China instead of creating more issues.

 

For more information on this topic, please visit the following links:

New York Times – China’s Trump Honeymoon: Unexpected, and at Risk of Ending

Reuters – U.S. targets Chinese bank, company, two individuals over North Korea

Washington Post –Taiwan arms sale, North Korea sanctions outrage Beijing in test of U.S.-China ties under Trump

Voice of America – US Swipes at China Signal a Micro Policy Shift in Disputed Sea

Bloomberg – China’s New Silk Road Encroaches on U.S. Turf in Eastern Europe

 

Compiled and edited by Emily Bulkeley