By Seema Sirohi
Unfortunately for Donald Trump, the debating society of the United States hates him more than it hates Xi Jinping or it would cheer Trump’s stand in the trade war.
Last week when Trump raised tariffs on $200 billion worth of Chinese imports from 10% to 25%, the focus was mainly on the immediate repercussions. This consists of the stock market or soybean farmers —but not on the strategic reasons. The question is why?
The one-sided narrative in the mainstream discourse is unfair, even if heartfelt. But, it is also driven partly by a deep dislike of Trump. There is no denying the fact that – there are plenty of reasons to dislike the US President and his domestic policies, but on matters related to China he happens to be right.
The debate largely misses the basic point – while the costs to US consumers are temporary, if high – the costs to China are higher and could be permanent as other countries fill the gap.
But Xi’s China gets a far more sympathetic hearing from US academics, former officials, think tankers and mainstream journalists despite the evidence. It’s breathtaking that Xi gets a pass relatively speaking, despite his concentration camps and debt-trap diplomacy.
Richard Hass, a former top US diplomat and now the president of the Council on Foreign Relations, said this on Twitter: “Insisting that China curtail subsidies is asking it to alter its economic model and risk high unemployment. This will fail. It is also hypocritical as US government will not end its subsidies or purchases from Boeing. Trade talks need a serious negotiable agenda.”
Much to unpack here, but at the most basic level — the Chinese economic model is the problem and harmful to others. Further, there is a big difference between subsidizing parts of Boeing to counter Airbus, which is also subsidized, and China’s policy of subsidizing everything right from raw materials to end products, high-tech industry, and future products.
But, there is plenty of commentary along the same lines, which either treats China as a real market economy or as a fair trader.
A “negotiable agenda” that Haas wants would essentially mean a surrender. It boils down to this: Since Xi would face domestic pressure and God forbid, political protests, don’t make it difficult for him, honor the “Century of Humiliation” and it’s their time now, and finally don’t force a loss of face.
The majority of analysis one reads or hears on radio and television is focused either on pointing out factual errors in Trump’s tweets on trade or on the admittedly real (but temporary) pain the trade confrontation is causing US farmers and businesses.
But then which great power competition is without pain? Trump is betting on a majority of Americans who are concerned about China. A 2018 Pew survey showed how deep the concern goes — the US trade deficit with China (82%), the large amount of US debt held by China (89%), cyber attacks (87%), the loss of jobs to China (83%) and its human rights policies (79%).
The many Democratic presidential candidates don’t have much to say about China and it could be a foreign policy issue that comes back to bite them. Bernie Sanders has at least mentioned China several times on Twitter but others are largely silent.
The overall debate led by mainstream media rarely examines the context or history of why the US has reached its tipping point with China. They continue to insist that the Trump Administration hasn’t made its case coherently for pushing the envelope with China even though it has done so, repeatedly in successive national security documents and reports.
US government websites – the White House, the US Trade Representative, Department of Defence and the Commerce Department – are replete with reports, evidence, history and most importantly, the reasons why?
What happened in the most recent US-China trade encounter is as follows — The Chinese changed the draft agreement the two sides had agreed on and were ready to sign and celebrate. It understandably caused the collapse of the latest round.
China’s negotiator Liu He told journalists later, that he thought it was perfectly acceptable to change an agreed upon draft before signing the final agreement. This is either too clever or too dumb – take your pick. Or perhaps, Xi’s team was trying to do the same old thing, as the Chinese have been doing for too long with previous US administrations, as well as with all other countries.
They thought the Americans would be desperate for a deal – soybean farmers hurting, tech giants stymied — what’s to lose in playing the same game again. They didn’t reckon that in this administration there are people who are convinced that China represents a different magnitude of threat to the US; And Trump in his own faulty, crass and often contradictory ways is willing to push, regardless of anything.
The director of policy planning in the State Department- Kiron Skinner, has recently said that, the Trump Administration is deep into developing a strategy for China based on the idea that it is a “fight with a different kind of civilization” for the first time in US history.
She went on to say that the Cold War with the Soviet Union was a fight within “a western family”. While this confrontation is different, China might not feel as vulnerable on the human rights front as the Soviet Union did and she (Kiron Skinner) may be right.
China will brazen it out on the human rights front but it is equally true that Muslim countries like Saudi Arabia and Pakistan have essentially given the concentration camps for Uighurs a certain legitimacy – by not criticizing Beijing’s policies and pretending their ignorance.
This is where Trump’s policy lacks vision. He should have built a coalition of the willing nations to back him for the final battle with China which he didn’t. Instead, he has picked up fights with Canada, the European Union, Japan, South Korea and India on trade.
That said, the effects of Trump’s trade war on the Chinese economy are greater. Chinese exports and industrial production have already been hit and its growth model is under threat. Trump’s strategy is essentially to slow China’s rise to superpower status because economic muscle translates into military muscle and eventually transcends to supremacy. Those who don’t see a pattern in Chinese behaviour are either not looking at it or acting ignorant.
Trump and his team are not ready to allow China that pleasure. Not yet. Whether, they can sustain the momentum is unknown but for the time being, they are standing firm.
However, China will fight long and hard to hang on to its model – steal intellectual property, create dependencies, use international institutions ruthlessly, not make domestic structural changes and play for time.
But, it doesn’t have all the cards to maintain the status quo. The costs of this trade war are not borne by American farmers alone, they are borne by the Chinese too – to a greater measure.
And China’s pain can be others’ gain.