Trump Meets China: Prospects for US-China Relations in the Trump Era - By Director Gordon Houlden

Director Gordon Houlden - 24 January 2017

It has become rather normal in US Presidential elections for candidates, especially if they are not incumbents, to campaign against China during the presidential primaries and until the November presidential election. This has, at least since the first term of President Bill Clinton, been followed by what is often a difficult first year for the new US administration, with the pursuit of policies which are resisted by the People's Republic of China (PRC).

The inauguration of President Trump, a US leader elected on promises to radically re-shape US foreign and domestic policies, has unsettled East Asian capitals from Tokyo to Seoul. But it is in China, Trump's favourite foreign target after Mexico, where there is the greatest anxiety regarding Trump's Asian polices.

Trump's salvos against China during the 2016 electoral campaign have been more extreme than the past presidential norm, but consistent with the general pattern of a non-incumbent candidate. But true to his insurgency style of campaigning, and his prominent use of social media, the artillery aimed at Beijing are not simply stump speeches, but also tweets that take direct aim at China, even in the delicate period before the presidential transfer of power.

Often, however, and not that deep into the mandate of a new president, policies aimed at restraining China or punishing Beijing for some dimension of Chinese behaviour which does not meet with Washington's approval begin to be seen as counter-productive by US decision-makers, and are quietly abandoned.


Trade

Particularly alarming to China are the repeated Trump salvos aimed at the terms of trade between the two countries, with Trump threatening heavy tariffs on imports of Chinese goods. But China in 2017 has more options in responding to US trade restrictions than in the past, including a more diverse set of trading partners and a larger internal Chinese consumer market, with a resulting reduced need for the US market. As well, China now has more options in terms of "push-back" or counter-measures that would harm US companies.

However, while the US market may no longer be an essential part of the PRC export-driven economy it is still significant. For the US, China represents a key market for the largest of US multinational companies and innumerable smaller firms, reflecting the reality that China possesses the second largest economy on Earth, one which is growing far faster than the US economy. Trump has promised economic growth and prosperity to his supporters, while the PRC needs relatively rapid growth to sustain its own employment levels and to meet public expectations of increased prosperity. The inter-dependence of the US and Chinese economies should serve a brake on Trump's ability to punish China for real or imagined unfair trade practices.


Taiwan and South China Sea

Taiwan

Two issues that have featured in comments by President Trump either during the election campaign or during the presidential transition have been the status of Taiwan and the South China Sea.

Taiwan, seen by Beijing as the unfinished last act of the reunification of China, is of prime significance to the People's Republic of China (PRC). Any US threat to re-work the "One China" compromises that facilitated the opening of US-China relations in the 1970's is seen as incendiary by Beijing, and will be stoutly resisted.

We do not yet know if the phone call between Trump and Taiwan's President Tsai Ing-wen and Trump references to re-opening of the "One China" policy are simply posturing, a lack of briefing by Asia experts, or serious policy.

South China Sea

Multiple US Administrations have resisted PRC interpretations regarding Chinese claims in the South China Sea. The reclamation and expansion of islands by China, and the US pivot or re-balancing of US military forces to Asia have exacerbated the tensions between the two Great Pacific Powers.

Tweets by Trump and confirmation hearing comments by Secretary of State Nominee Rex Tillerson regarding the Chinese presence in the South China Sea have alarmed Beijing. As with Taiwan, we do not yet know if these responses were considered policy options, tactical bluff, or simply off-the-cuff remarks aimed at domestic US audiences.

The US and China have very different perspectives on international law as it pertains to navigation by warships, policies that are unlikely to change in the foreseeable future. The risk of miscalculation or error is always present in air and naval operations, as aircraft maneuvering in close proximity to other aircraft, or ships turning in tight circles in shallow waters, are at risk of collision. As well, these units, even if following protocols imposed by their commands, can make mistakes of navigation, leading to the loss of life. A Chinese Coast Guard vessel sunk, even if by accident, by a US naval vessel would immediately precipitate a crisis, and might generate a political imperative to respond with force. The reverse could have the same result.



Regional Asian Issues

Democratic People's Republic of Korea (DPRK)

When the US identifies a foreign policy priority, be it North Korea or Iran, it becomes evident that Chinese help or at least Chinese acquiescence is essential to obtaining United Nations Security Council support, given the PRC veto. Similarly, progress on isolating or punishing the DPRK or Iran can be undercut by Chinese refusal to participate in, or strictly enforce, any sanctions, whether political or economic.

The implementation of tariffs or other trade sanctions by Trump when dealing with a now powerful China risks "contaminating" a range of other foreign policy and security files. While we may presume that trade issues will be the top priority for the White House, there are a range of security challenges which could catapult to the forefront of US concerns.

Perhaps the most volatile threat to the US in Asia is the emerging ballistic missile capacity of the Democratic People's Republic of Korea (DPRK) combined with Pyongyang's nuclear weaponry. While it has been possible for the US to focus on efforts to constrain North Korean weapons' development, the prospect that a nuclear-tipped missile might reach the continental United States may pose too serious a risk for the US to safely ignore.There are also subsidiary complications. The deployment of the Terminal High Altitude Area Defence (THAAD) anti-ballistic missile system in South Korea is seen as a threat by China, while the deployment is seen as helpful in defence terms by the current Republic of Korea government and by its US security guarantor. An attack by the US on DPRK nuclear facilities would almost certainly trigger the artillery bombardment of Seoul by the DPRK armed forces, with destabilizing economic effects on the entire region, including the PRC economy.


East China Sea

The difficulty of solving the territorial disputes related to the Diaoyutai/Senkaku Islands is made much more difficult by the deep animosity formed between 1937 and 1945. That is not to say that the territorial and maritime disputes are not real; rather, the claims involving the islands and waters are exacerbated by the WWII heritage, making the dispute more intractable and more difficult to solve.

The risks posed by the East China Sea island dispute are amplified by the prospect that any military hostilities between Japan and China would likely draw in US military forces in the region based on US-Japanese security commitments. On the other hand, the existence of these security guarantees may help restrain the two disputing parties. In the case of Japan this provides a reassurance that Japan will have US military assistance. In the case of China the US security connection forces China to contemplate the hazards of a much broader war.

Realistically, it is hard to imagine a deliberate decision to open hostilities by either Japan or China, and the greatest danger is probably, as in the case of the South China Sea, a cycle of escalation caused by accidental encounters or risky navigation by individual aircraft or ships.


Best Case Scenario (as seen from China)

The Trump talk during the election campaign about the declining value of military alliances has piqued Chinese attention. A Japan freed from the benefits, but also released from the constraints of US defence commitments to Japan is viewed with interest by Chinese foreign policy experts, who generally favour the displacement of US military forces from the Western Pacific. The end of the Obama "pivot" or "rebalancing" could open prospects for China-led security alliances in East and Southeast Asia.

Similarly, the Chinese will not mourn the death of the Trans-Pacific Partnership (TPP), which was the economic component of the broader Obama plan for reinvigorated US engagement in Asia. China has its own regional trade plans that would see trade organized in structures that are Asia-centric.

Early indications are that the Trump Administration will not pay close attention to the human rights practices of foreign states, a change that would be welcomed by Beijing, which sees such criticisms as in intrusion in their internal affairs and an affront to state sovereignty.


Best Case Scenario (as seen from the US)

The Trump Administration's top China goal will most likely be the substantive reduction of the massive PRC trade surplus with the US, and the re-location of substantive manufacturing from China to US factories. (However, inexpensive Chinese imports can also be seen as a boon for US consumers.)

While the US might wish to see the removal of military capability from South China Sea islands, this is most unlikely, and the best achievable result from negotiations would likely be a de facto freeze on further island reclamation and militarization.

The US may continue to push for expansion of US political and military ties with Taiwan, but these will be strenuously resisted by Beijing, and a focus on this dimension of US-China relations risks strong PRC counter-measures in other dimension of Sino-American relations. The US is more likely to settle for small cosmetic changes in their Taiwan relationship which will be resented but tolerated or deliberately overlooked by Beijing (although with a reduction in the already limited Chinese trust in US intentions).


Conclusion

There are still prospects that after a period of confrontation (political and economic) over trade and regional political issues, Washington and Beijing will be able to forge a pragmatic set of compromises that pleases neither, but which avoids more serious conflict. Given China's global economic reach and enhanced influence in regional issues both in Asia and elsewhere, the Trump Administration has an interest in seeking a consensus between Washington and Beijing that might allow these two powerful states to shape the world order. At this point, however, this seems a tall order given the rocky start to the 2017 Sino-American relationship and the competition baked into Sino-American Great Power rivalry.

What is most probable, given the range of sensitive issues that have been touched upon in public comments by Trump and his advisors, is that we will see a difficult bilateral relationship between Washington and Beijing, at least in the first year of the Administration, and perhaps beyond.

But we should also not assume that open conflict between the US and China is inevitable. Both sides have strong incentives to continue to seek compromise, and while each can harm the other, most of the means to do so would also trigger self-inflicted wounds.