The co-existence of difficulty and opportunity in Sino-US relations
By Yuan Youwei |
China Watch |
Updated: 2018-07-06 15:52
Yuan Youwei
Since Donald Trump was elected president of the United States, Sino-US relations have weathered dramatic ups and downs, which turned those optimists to be more cautious and to reach a consensus that the US strategy toward China has made a U-turn. The basic features are as follows:
First, the strategic adjustment is swift. After the two leaders met at Mar-a-Lago in April 2017, the momentum of Sino-US relations was quite sound. When I accompanied Chinese scholars and experts on a visit to the US last June, the American counterpart was very positive and forward-looking. Both sides were talking about 100-day plan and even anticipated that the two governments would reach a one-year plan soon afterwards. US companies were interested in China’s Belt and Road Initiative and eager to cooperate with Chinese enterprises in the third markets. After Trump paid a visit to China last November, US entrepreneurs were satisfied with the agreements and deals reached, which were valued as high as $253.5 billion. But at the end of last year and early this year, the tone of the US administration changed fundamentally. The US Ambassador to China and diplomats started saying that the US administration had run out of patience with China. I myself was astonished with the fundamental change and it just happened so quickly, almost overnight.
Second, the way of dealing with China is maximum pressure in an incremental manner. A series of US administration documents were published, including the National Strategic Security report, the US Defense Strategy Report, the Nuclear Posture Review and the State of the Union address. Almost all of them identified China as one of the major competitors, the other one being Russia. After the overall environment has changed, a variety of acts followed. First was a number of anti-dump and anti-subsidy cases, then the 201 investigations on imported solar panels and washing machines in February and the 232 investigations on imported steel and aluminum products. As the investigations are targeted at all imports to the US, there was a debate among Chinese experts whether they were exclusively targeted at China or not. After following closely the process, I am assured that China is its target. US administration officials, such as Commerce Secretary Wilbur Ross, said repeatedly and explicitly in public that these investigations were used to prevent China from shipping its overproduction to the US via other countries. There should be no doubts that the 301 investigations are targeted at China.
Third, the attacks are in wide scope. The Formosa Association of Public Affairs (FAPA) is the most important Taiwan lobbying group in the US and has a long-standing relation with the Congress. Since 2016, FAPA has done all it could to promote the passing of the Taiwan Travel Act. Though FAPA set this goal as one of its priorities in 2016 and 2017, its efforts were frustrated. But Trump changed the status quo. As president-elect, he talked with Tsai Ing-wen over the phone, which was unprecedented. Then after the Taiwan Travel Act was passed by the Congress, Trump signed it straight away. Besides, the Trump administration also took some provocative measures in the South China Sea. For example, it withdrew its invitation to China of participating in the RIMPAC 2018 exercise, on the excuse of China’s "militarization" of the South China Sea.
Due to the U-turn of US strategy toward China, Sino-U.S relations will see difficulties in the near future. Just as Elizabeth Economy from the Foreign Affairs Council said, Trump pushes the expectations on China high. Actually, there are currently two consensuses on the China issue in the US -- the administration-Congress consensus and bipartisan consensus. All agree that the US needs to be tough on China, but they don't agree on which route should be taken. So long as the expectation is high and the consensus has been reached, the pressure on China will not disappear soon. The counter-Trump argument does exist in US business circle, but it was not as strong and consolidated as in 1993 when then president Bill Clinton linked the MFA with human rights.
Trump’s way of making deals needs to be fully considered. His tough negotiating tactics are displayed in his handling of the family separation controversy on immigrants. According to my own observation, it has three features: first is constant, maximum pressure, refrain from backing down; second is selectively using examples and statistics which are in line with his interests; third is being realistic if he finds no way out.
The mid-term elections are a critical element for current Sino-US relations. Trump regards them not only as a test of his two-year in office, but also as the foundation for his remaining tenure and stepping stone to his reelection in 2020. So he will continue to be tough on China to realize his campaign promise and win the support of his conservative base.
Last but not least, we need to take into account the trend of US society toward conservatism. Nowadays, the most outstanding feature of the US politics is polarization. But for the whole society, it demonstrates the uneven polarization, leaning toward conservatism and protectionism.
If we want to look at the big picture, we should not take a blind eye to some slim, but positive trend in the states. US businesses have already felt the pain of countermeasures taken by Mexico, Canada and the European Union. On top of it, they are watching closely and are concerned that the Trump administration declared to impose tariffs on an additional $34 billion in Chinese imports from July 6, a move that China has promised to match. US business fears that they would bear the brunt of it. Some US companies, such as Harley-Davidson and Moog, said Chinese tariffs may force them to move overseas. Some major lobbying groups distance themselves from Trump’s stance on tariffs. The US Chamber of Commerce released an analysis of how tariffs would affect all 50 states. More than that, Americans for Prosperity, a group funded by the Koch brothers, claimed that the tariffs would erase all economic gains from tax cuts and regulatory relief. These tariffs risk undermining everything good that’s been happening. Some media says that the lackluster stock market is due to the trade war and some media even project another recession in the US economy because of trade tension. The Trump administration has defended its tariffs and dismissed the trade tension as hiccups. Now the counter-tariff forces look weak, but we cannot rule out the possibility that it might grow and become strong enough to stop Trump’s actions. At least, it’s my good wish.
In order to maintain and encourage the positive trend, we need to keep cool-minded. It makes no sense for us to be optimistic or pessimistic without any tangible clue. If the Trump administration is meant to target China as its major adversary, the Chinese side needs to deal with it squarely. If the counter-tariff forces grow strong enough, it might reverse the current course. Besides, a low-profile and communication is crucial as well. The US sometimes misunderstands or misreads China’s words and actions and overreacts under some circumstances. That China keeps a low-profile and keep communicating with the US side will be conducive for the smooth development of relations. The Trump administration has torn apart some of the global industry chains and impacted the countries along those chains. This generates uncertainty for the world economy and the economies of countries involved. US allies by no means feel comfortable when the Trump administration point fingers at them. So it is the high time to make friends and expand the friend's circle to jointly maintain the multilateral trade system.
Yuan Youwei
Since Donald Trump was elected president of the United States, Sino-US relations have weathered dramatic ups and downs, which turned those optimists to be more cautious and to reach a consensus that the US strategy toward China has made a U-turn. The basic features are as follows:
First, the strategic adjustment is swift. After the two leaders met at Mar-a-Lago in April 2017, the momentum of Sino-US relations was quite sound. When I accompanied Chinese scholars and experts on a visit to the US last June, the American counterpart was very positive and forward-looking. Both sides were talking about 100-day plan and even anticipated that the two governments would reach a one-year plan soon afterwards. US companies were interested in China’s Belt and Road Initiative and eager to cooperate with Chinese enterprises in the third markets. After Trump paid a visit to China last November, US entrepreneurs were satisfied with the agreements and deals reached, which were valued as high as $253.5 billion. But at the end of last year and early this year, the tone of the US administration changed fundamentally. The US Ambassador to China and diplomats started saying that the US administration had run out of patience with China. I myself was astonished with the fundamental change and it just happened so quickly, almost overnight.
Second, the way of dealing with China is maximum pressure in an incremental manner. A series of US administration documents were published, including the National Strategic Security report, the US Defense Strategy Report, the Nuclear Posture Review and the State of the Union address. Almost all of them identified China as one of the major competitors, the other one being Russia. After the overall environment has changed, a variety of acts followed. First was a number of anti-dump and anti-subsidy cases, then the 201 investigations on imported solar panels and washing machines in February and the 232 investigations on imported steel and aluminum products. As the investigations are targeted at all imports to the US, there was a debate among Chinese experts whether they were exclusively targeted at China or not. After following closely the process, I am assured that China is its target. US administration officials, such as Commerce Secretary Wilbur Ross, said repeatedly and explicitly in public that these investigations were used to prevent China from shipping its overproduction to the US via other countries. There should be no doubts that the 301 investigations are targeted at China.
Third, the attacks are in wide scope. The Formosa Association of Public Affairs (FAPA) is the most important Taiwan lobbying group in the US and has a long-standing relation with the Congress. Since 2016, FAPA has done all it could to promote the passing of the Taiwan Travel Act. Though FAPA set this goal as one of its priorities in 2016 and 2017, its efforts were frustrated. But Trump changed the status quo. As president-elect, he talked with Tsai Ing-wen over the phone, which was unprecedented. Then after the Taiwan Travel Act was passed by the Congress, Trump signed it straight away. Besides, the Trump administration also took some provocative measures in the South China Sea. For example, it withdrew its invitation to China of participating in the RIMPAC 2018 exercise, on the excuse of China’s "militarization" of the South China Sea.
Due to the U-turn of US strategy toward China, Sino-U.S relations will see difficulties in the near future. Just as Elizabeth Economy from the Foreign Affairs Council said, Trump pushes the expectations on China high. Actually, there are currently two consensuses on the China issue in the US -- the administration-Congress consensus and bipartisan consensus. All agree that the US needs to be tough on China, but they don't agree on which route should be taken. So long as the expectation is high and the consensus has been reached, the pressure on China will not disappear soon. The counter-Trump argument does exist in US business circle, but it was not as strong and consolidated as in 1993 when then president Bill Clinton linked the MFA with human rights.
Trump’s way of making deals needs to be fully considered. His tough negotiating tactics are displayed in his handling of the family separation controversy on immigrants. According to my own observation, it has three features: first is constant, maximum pressure, refrain from backing down; second is selectively using examples and statistics which are in line with his interests; third is being realistic if he finds no way out.
The mid-term elections are a critical element for current Sino-US relations. Trump regards them not only as a test of his two-year in office, but also as the foundation for his remaining tenure and stepping stone to his reelection in 2020. So he will continue to be tough on China to realize his campaign promise and win the support of his conservative base.
Last but not least, we need to take into account the trend of US society toward conservatism. Nowadays, the most outstanding feature of the US politics is polarization. But for the whole society, it demonstrates the uneven polarization, leaning toward conservatism and protectionism.
If we want to look at the big picture, we should not take a blind eye to some slim, but positive trend in the states. US businesses have already felt the pain of countermeasures taken by Mexico, Canada and the European Union. On top of it, they are watching closely and are concerned that the Trump administration declared to impose tariffs on an additional $34 billion in Chinese imports from July 6, a move that China has promised to match. US business fears that they would bear the brunt of it. Some US companies, such as Harley-Davidson and Moog, said Chinese tariffs may force them to move overseas. Some major lobbying groups distance themselves from Trump’s stance on tariffs. The US Chamber of Commerce released an analysis of how tariffs would affect all 50 states. More than that, Americans for Prosperity, a group funded by the Koch brothers, claimed that the tariffs would erase all economic gains from tax cuts and regulatory relief. These tariffs risk undermining everything good that’s been happening. Some media says that the lackluster stock market is due to the trade war and some media even project another recession in the US economy because of trade tension. The Trump administration has defended its tariffs and dismissed the trade tension as hiccups. Now the counter-tariff forces look weak, but we cannot rule out the possibility that it might grow and become strong enough to stop Trump’s actions. At least, it’s my good wish.
In order to maintain and encourage the positive trend, we need to keep cool-minded. It makes no sense for us to be optimistic or pessimistic without any tangible clue. If the Trump administration is meant to target China as its major adversary, the Chinese side needs to deal with it squarely. If the counter-tariff forces grow strong enough, it might reverse the current course. Besides, a low-profile and communication is crucial as well. The US sometimes misunderstands or misreads China’s words and actions and overreacts under some circumstances. That China keeps a low-profile and keep communicating with the US side will be conducive for the smooth development of relations. The Trump administration has torn apart some of the global industry chains and impacted the countries along those chains. This generates uncertainty for the world economy and the economies of countries involved. US allies by no means feel comfortable when the Trump administration point fingers at them. So it is the high time to make friends and expand the friend's circle to jointly maintain the multilateral trade system.