Trump's China Strategy Isn't Working

- Jan 07, 2019-

The administration’s scattershot approach is ineffective, if not harmful to U.S. interests. And it’s only amplifying Beijing’s nationalist tune.

The Trump administration’s willingness to push the Chinese harder on trade has struck a bilateral chord. Beijing is listening. So far, so good. Now the question is what the U.S. wants to achieve. Answer: the total destruction of China as a competitor.


That isn't a trade goal, and the demands being made contradict one another. This aim also unnecessarily awakens Beijing’s deepest nationalist fears.


Unsure what to offer next – and convinced that the U.S. effectively persuaded Canada to take an executive at Huawei Technologies Co. hostage – China is falling back on familiar jingoistic strategies and rhetoric. Things are likely to get much worse from here.


Meanwhile, the U.S. economy is incurring pain that the Trump administration seeks to alleviate with a $12 billion bailout program to aid farmers. Pain may be worth enduring if something is being accomplished. But the only likely outcome is a reduction in trade and more expensive Chinese products. In other words, fat taxes on the American consumer.


Over the past few months, Chinese imports from the U.S. have dropped sharply, declining 25 percent in November, even as its exports to the U.S. continued to rise. The big falloff started in July, after Washington implemented the first list of China-specific tariffs.


Initially, it was startling and encouraging that a U.S. administration was finally willing to call China’s bluff. Problems in bilateral trade genuinely run deep, and Beijing has a coordinated strategy of stealing U.S. technology and evading American export-control laws. Market access has in many ways deteriorated since the country joined the World Trade Organization in 2001 and made sweeping commitments to open up. The country subsidizes industries that then gain unfair advantages against competing foreign products.


China’s political leadership rules at the pleasure of its military and security forces, a fact poorly appreciated in the U.S. Beijing's more regressive and nativist powers are held at bay when the country demonstrates strength, and even bellicosity. The Trump stance could easily trigger a backlash for which the U.S. is ill-prepared.