Trump Will Be Steadier on China Than His Taiwan Call May Suggest

Trump Will Be Steadier on China Than His Taiwan Call May Suggest

Getty Images/The Fiscal Times

There’s only one smart way to take all the heavy breathing since Donald Trump’s 10-minute telephone conversation last Friday with Tsai Ing-wen, Taiwan’s president. Ignore it: Most of what’s been ricocheting around the press last week misses the point by miles.

There might have been grounds for panic in Washington’s foreign policy circles had Trump signaled his intention to recognize Taiwan’s independence from China. Since Nixon and Mao signed the Shanghai Communiqué in 1972, the U.S. is committed to accepting Beijing’s “One China” policy. It’s the Chinese leadership’s hottest button.

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But repudiating so fundamental a feature of the U.S.-China relationship isn’t remotely an entry in Trump’s playbook. By the evidence, and there’s plenty, geopolitics of this kind doesn’t actually interest the President-elect.

Put simply, Trump wants a new deal with China on the trade and investment side. He has made this clear in bold-faced capitals more or less every day since he announced his run for the White House in mid-2015.

How all the diplomats and think-tank denizens could so thoroughly misunderstand this is hard to fathom. The takeaway here, and it’s not reassuring, is that those responsible for Washington’s China policy are a jumpy, uncertain lot—less than confident that what they’ve put in place is sturdy.  

Yes, Trump knew there were political and diplomatic implications when he took Tsai’s call. Let’s dispense with the thought that he’s not smart enough to figure that out beforehand—the bull-in-a-China-shop thesis.

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But with Trump’s constant complaints about the trade imbalance, exchange rates, and other such matters in mind, that telephone call looks a lot different. It’s the dealmaker as diplomat: That brief chat is Trump’s opening move—the intent being to throw Beijing a touch off balance at the start of what could well be four years of very steady, intense renegotiation of the economic relationship.

Sino-American relations, let’s not forget, are no monument to clever diplomacy. They’re a muddle, to put the point bluntly, and have been for fully several decades.

On one hand, we have two huge economies that are densely interdependent on multiple levels. On the other, Beijing and Washington are sharply at odds on every military and security question lying between them—policing the South China Sea currently the most prominent among them.

President Obama didn’t create this two-headed beast, but he’ll dump it in Trump’s lap come January 20. And let’s admit it: There’s more asymmetry and mess across the Pacific now than there was in 2008—the legacy of Obama’s all-too-fancy “pivot to Asia.”

The Pentagon has turned the South China Sea into a flashpoint over the past several years—this quite beyond necessity. The Trans-Pacific Partnership, Obama’s over-ambitious trade alliance, pointedly excludes the Chinese—drawing a line where there doesn’t have to be one. And China’s now developing its own alternative, the Regional Comprehensive Economic Partnership. (Funny how those smart diplomats didn’t anticipate this perfectly predictable outcome.)

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Let’s look briefly at the two sides of China policy Trump will either have to leave as is or refashion. 

• The security relationship. Trump inherits a security policy with a fatal flaw. China’s emergence as a regional power has left the Pentagon, which has outsized influence on Washington’s Asia policies, in a time warp. Pretending in the 21st century that it’s the 1950s and the Pacific is an American lake is preposterous as a strategic framework—a recipe for conflict.  

The question for Trump, and it’s a very good one, is whether he’ll see and address this 800-pound error or carry on with the Pentagon’s indulgence in nostalgia.  

No clear signals yet. Trump may not be interested in strategic questions, but a lot of the people around him are. The New York Times reported Wednesday that Bob Dole, long close to the Taiwan lobby, had been advising Trump while the Tsai call was in the planning stage.

Last month a group of Chinese scholars issued a report forecasting that Trump—whom the Chinese leadership subtly favored over Hillary Clinton—will sustain Washington’s tough stance in the South China Sea. No change, with James “Mad Dog” Mattis, Trump’s defense secretary-designate, running the shop. 

Maybe, maybe not. Mattis is a tough Marine, but his record indicates he knows the military’s limits.

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Here’s Andrew Nathan, a distinguished sinologist at Columbia, in a Foreign Policy forum published just after the election:

“Trump was the practitioner of the art of the deal. If he takes office, he will look for an economic and strategic grand bargain with China, some version of a regional condominium that reduces American resistance to the spread of Chinese military and political influence in Asia in exchange for greater opening of the Chinese economy to U.S. exports and investment, Chinese investment in U.S. infrastructure — and perhaps a few permits for Trump hotels and towers thrown in as side payments.”

I’m with Nathan. Whatever else Trump may be, he’s neither an ideologue nor a saber-rattler. He’s a realist who wants to know what time it is. As backup evidence, Trump’s taking the same approach to Russia, if you think about it: We’re great, you’re great, let’s deal.

• The economic relationship. Trump has a problem here, and a big part of it is of his own making. His take on U.S.-China economic ties is far too simplistic. China’s phenomenal growth doesn’t compute to a big loss the White House needs to remedy.  

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American businesses have put more than $5 trillion into plant and equipment on the mainland since the turn of this century. Some of the resulting production goes into the Chinese market and a lot is exported back to the U.S. There are supply chains to think about—U.S.-based manufacturers sourcing components in China. Now there’s Chinese investment in American assets, too: It’s growing leaps and bounds.

There are bound to be imbalances to negotiate in so complex a relationship, but Trump risks a shoot-in-the-foot problem if he thinks it’s time to bust up a party because only half the people there are having fun.

A 45 percent import tariff on Chinese goods, as Trump promised on the campaign trail is thoroughly unrealistic. This was Dennis A. Muilenburg’s point when the Boeing CEO warned Trump that China could easily retaliate by shifting its formidable order book to Airbus.  

Trump needs some tutoring. First order of business is dropping the shrill charge that Beijing manipulates the yuan to its advantage. That problem was resolved years ago. Harping on it makes Trump seem stupid, and that’s not the way he wants to come across with the Chinese.

Bottom line: Consider those jobs Trump got Carrier to keep in Indiana a good cue. Trump will manage some impressive gestures in his dealings with China on the economic side, but it’s unlikely he’ll get far if he tries to reform a very formidable political and economic structure in which both sides have big interests.