US President-elect Donald Trump has made his unpredictability a signature in both business and politics, and this unorthodox trend is now shaping his policy toward China.
Trump broke a 40-year-old tradition in a call with Taiwanese leader Tsai Ing-wen on Friday, followed by a series of tweets from the incoming president lambasting China’s monetary policy and its taxes on US exports.
While it is no surprise that Trump is setting his sights early on one of the toughest challenges for his presidency — leveling the economic and political playing field with China — his approach could offset the sensitive balance and bring unexpected economic costs to both countries.
A ‘deliberate’ call
The Trump team has gone to great lengths to play down the 10-minute call with the Taiwanese leader, with the president-elect emphasizing on Twitter that she “CALLED ME,” not vice versa. Yet experts agree that the call was unlikely a coincidence, and was a deliberate move by the Trump team.
“It probably was a deliberate move,” says Joshua Kurlantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations. But even if it was planned, “it could also be a mistake.”
Kurlantzick added: “I don’t see evidence that it was done with a plan that looks at how China might respond, what kind of cascade of events would take place, and how it fits into any grander strategy.” The call also did not involve any coordination with the administration of President Barack Obama or the State Department.
The sensitivity over the call is out of fear that it could signal a departure from the One China policy instituted by then-President Richard Nixon in 1979, whereby US leaders avoid contact with Taiwan so as not to encourage its independence from China.
Dan Blumenthal, director of Asian Studies at the American Enterprise Institute, does not see Trump’s call as a break with the One China policy. He tells Arab News: “We (the US) have our own interpretation of the One China policy that acknowledges China’s position on Taiwan but doesn’t accept it.” Blumenthal takes issue with “China pushing its view that Taiwan is already a part of it and a ‘renegade province,’ hence we’re going to have to agree to disagree.”
For Trump the bargainer, the call could be an early overture from him to gain leverage over China in any forthcoming negotiations. Blumenthal sees it “as a good way to indicate that Trump will set the agenda in his relations with Taiwan and China within the framework of One China.”
However, given China’s sensitivity to the Taiwan issue and how it reacted in the past — launching military exercises in 1995 after the US granted a visa to Taiwanese leader Lee Teng-hui — unexpected retaliation could come now. “China is going to push back,” says Kurlantzick, even though “no coherent strategy” is in place from the Trump team yet.
Echoes of George W. Bush
Trump’s campaign rhetoric toward Beijing — lambasting the trade deficit of $366 billion, with exports from China reaching about $482 billion in goods to the US last year, while the US exported about $116 billion in goods to China in 2015 — will likely continue throughout his presidency as part of his economic message to the working-class voters who supported him in the rust-belt states.
“It’s time for more balance in the relationship, and we have a lot of strategic leverage,” says Blumenthal. While the Obama administration warned that Trump’s moves could “undermine” progress with China, Blumenthal says: “No one would characterize the relationship with Beijing as good right now.”
He describes Obama’s Asia pivot in his first term as one leading “to more assertive policies by Washington, whereby China reacted harshly.” This has “left China more emboldened and angry, while our allies and friends complain about a vacuum as we’ve been somewhat adrift.”
Kurlantzick sees echoes of Trump’s China rhetoric in the George W. Bush campaign and first term in 2000. While Bush did not criticize trade policies with China, he ran on a platform critical of Beijing. Bush said in 1999 that China would be “respected as a great power... but not unchecked,” declaring: “China is a competitor, not a strategic partner.”
A more assertive policy by a Trump administration toward Beijing seems to be in the works. “I think we should act on our interests and values as much as China does,” says Blumenthal. “Right now it’s a bit one-sided. China provokes and we react.”
However, with Trump’s promises of withdrawing from the Trans Pacific Partnership (TPP), a 45 percent tariff on Chinese goods and tension in the South China Sea, Kurlantzick sees serious room for escalation between Washington and Beijing, and ramifications on both economies.
“It all depends on whether both sides have some kind of reasonable way to continue the relationship without rapid escalation,” Kurlantzick concludes. “If it turns to tit-for-tat tariffs or other economic levers, that’s going to be a big problem for everyone.”