Trump on China

Lowell Dittmer. Asian Perspective. Volume 41, Issue 4. October-December 2017.

Ever since Nixon’s ice-breaking 1972 visit to China, the China issue has been a salient part of American presidential elections. Typically, this takes the form of the challenger’s bashing the incumbent for being taken in-for “coddling” the “butchers of Beijing,” as Bill Clinton put it in 1992. Donald Trump’s rhetoric rang true to form. But the November 2016 Trump election was a shock to the political system for other reasons as well. First, the outcome was a huge upset, in which an outspoken billionaire developer and former showman without military or political experience came out of nowhere to defeat an experienced former secretary of state and senator strongly supported by a still popular incumbent. Second, Trump is an outlandish personality- mercurial, bombastic, pugnacious, hyperactive, narcissistic, and bluntly outspoken on whatever happens to cross his mind, without the usual politician’s obsession with avoiding self-contradiction. He paradoxically combines a visceral xenophobia with great empathy for unpopular foreign strongmen (e.g., Putin, Duterte). This has fascinated the news media to no end, who award him generously with free publicity, if mostly critical. Third, Trump has boldly defied “political correctness” in foreign policy as in domestic political discourse, not bothering to consult with his party’s think tanks or established foreign policy elites (except Henry Kissinger), to make proposals orthogonal to conventional wisdom or GOP orthodoxy. He has, for example, at various times espoused or offhandedly concurred with the nuclear weaponization of Japan and South Korea, the disavowal of all free-trade agreements including the World Trade Organization, the notion that global warming is a Chinese plot, or the screening of immigration based on religion.

Thus the nation and indeed the world awaited his inauguration with fear and trembling. While an electoral turnover periodically occurs in all mature democracies and need excite no such alarm, Trump’s election seemed to many to represent a radical break with the established bipartisan democratic paradigm, leaving those who had embraced and worked to extend it, in both the political and intellectual communities, in the lurch, and they have had difficulty coming to terms with the possibility that their old reference points and frameworks may no longer apply (at least for the next four years). Thus, there has been no “honeymoon” but only a blistering counterattack. To Trump’s surprise, the election, it seems, is not over.

What can we now expect? Trump is what Mel Gurtov (2017) calls a “shape-shifter”: it is hard to pin him down. Since his election he has swung in at least three different directions. First, he has moved from realist to interventionist: “It is the right of all nations to put their own interests first,” as Trump put it in his inaugural address (Blake 2017a). “In a Trump Administration, our actions … will be tempered by realism,” the new president declaimed, and his prioritization of the national interest (“America first”) and professed interest in disengaging from unnecessary wars or nation-building in the developing world paralleled the strategy of “offshore balancing” advocated by many realists. Trump does not seem interested in mobilizing US power to support the international liberal order nor has he expressed interest in maintaining America’s web of alliances. Yet Trump has adhered to this position inconsistently since his inauguration. He initiated America’s first intervention in the Syrian civil war (a “humanitarian intervention” applauded by some former critics), for example, and revived the American counterinsurgency engagement in Iraq, Afghanistan, and Yemen. Based on Barack Obama’s transitional briefing pointing to the looming peril of the North Korean nuclear threat, Trump seized upon Kim Jong-un’s New Year’s Day announcement of a forthcoming intercontinental ballistic missile (ICBM) to rekindle the North Korean crisis, raising the openended possibility of military intervention. His confederates have expressed strong support of NATO and the Asia Pacific alliances, presumably with his approval. Second, as a businessman he exhibits marked mercantilist proclivities, as for example in his campaign promise to build a wall on the Mexican border to halt illegal immigration and “make Mexico pay for it,” or to “take the oil” as a way of cutting off a source of revenue for the Islamic Caliphate. This is perhaps his most consistent position, but at the same time his ambitious budgetary plans are Keynesian-a trillion-dollar infrastructure plan, a big tax cut-he has even used Roosevelt’s term, “prime the pump.” Third, particularly since his inauguration, as Trump has slowly begun staffing his administration and working with the Republican Congress, there has been a return to traditional Republican foreign policy doctrine: a muscular internationalism with emphasis on a strong military and a willingness to unleash it against targets incapable of retaliating, reaffirmation of the five US mutual defense alliances in the Asia Pacific (Japan, South Korea, Thailand, the Philippines, and Australia), and of course anticommunism. Yet his trade and economic priorities veer sharply to the left of traditional Republican preferences for free trade and balanced budgets. It is conceivable that Trump’s radical break with convention is based mostly on political inexperience and that his avowed “flexibility” and a steep learning curve among more conventional advisers will enable him to evolve to a somewhat more moderate position.

Although clearly a unique phenomenon, Donald Trump is also a product of his time. We hence begin by outlining the foreign policies of the Barack Obama administration that provided his campaign’s rhetorical foil, as he all but ignored Hillary Clinton’s substantive platform. We then turn to Trump’s China policy platform as set forth in his presidential campaign, followed by an early and hence tentative look at his Asian policies as they have evolved since inauguration.

Anything but Obama

To put Trump’s critique into context, we begin with an introduction of the Obama administration’s foreign policy. Obama’s driving policy objectives upon taking office were reversing the American overstretch of its long and inconclusive military interventions in the Middle East; shifting (“pivoting”) the US strategic focus toward Asia as the most consequential region for future global politics and economics; and investing in multinational partnerships and cooperation to deal with complex challenges and uphold the liberal international order. Obama’s predecessor and rhetorical target in Obama’s own campaign was George W. Bush, and Obama aspired to rebuild US prestige or soft power in juxtaposition to his predecessor’s problematic ventures in regime change and preemptive wars. This entailed recalibrating US priorities to a more polycentric and contested international environment, distinguishing between vital interests such as preventing terrorist attacks or nuclear proliferation, and lesser interests.

Following Obama’s attempt to support and expand the 2010 “Arab Awakening” (that he felt his June 2009 Cairo speech helped inspire), as for example by telling Egyptian president Mubarak and Syrian president Assad to step down and by lending crucial support to the “no-fly zone” that in augmented form precipitated the downfall of Gaddafi in Libya, Obama seems to have decided that in view of the unfortunate consequences of these interventions almost any attempt to intervene was likely to do more harm than good (Goldberg 2016). Thus he subsequently opted to “compartmentalize” relations with challengers such as China, Russia, and North Korea (DPRK), opting, for example, for “strategic patience” with the DPRK. Hereafter Obama determined insofar as possible to avoid involvement in the counterinsurgency quagmire (for example, initially underestimating ISIS and deferring any attempt to fight it) and to use force in more precise and limited ways, for example in the greatly expanded use of drones. Finally, he decided that the thrust of his foreign policy should not be mere power balancing but the construction of a set of multilateral rules of the game and operational principles that could command widespread consensus.

Critiques from the foreign policy intelligentsia came from two directions. On one side there were those who criticized Obama’s “lead from behind” leadership style as, in effect, appeasement, leaving a power vacuum that would embolden rivals to fill it. The prime example was Obama’s response to the use of chemical weapons by the Syrian regime in the summer of 2013 in open defiance of the “red line” the president had set. To the surprise of his advisers, Obama declined to respond; however, upon deliberation he opted to refer the issue to Congress (which also chose not to respond), whereupon Russia interceded by negotiating an agreement with Syria for the forfeiture of all [s/c] chemical weapons. Critics alleged that this was a blow to US credibility with wide-ranging implications. The contrary criticism was that Obama did too much, wasting resources on nation-building and human rights violations in less developed countries that could better be used to rebuild domestic infrastructure. Trump’s criticisms borrowed from both sides, deriding Obama for undermining American credibility by issuing orders he could not enforce in Syria and the South China Sea, but also for wasting resources trying to promote democracy or human rights in places where American interests were not directly at stake.

The Trump Campaign Platform

At the core of Trump’s presidential campaign were domestic issues, beginning with illegal immigration, antiterrorism, and the need to restore industry and relieve long-term unemployment. The foreign policy dimension, however, emerged clearly in the course of the campaign. First, he revived Charles Lindbergh’s “America first,” vowing that “it is the right of all nations to put their own interests first.” His perspective on America’s current standing in the world was, however, not a Reaganesque “city on a hill” but rather a country that was in a disastrous mess after several decades of corrupt mismanagement. Thus he explicitly stated that he does not believe in “American exceptionalism” (Corn 2016) partly because contemporary America was in such woeful shape that it could not be said to be exceptional. Underlying this is a view of the world as a jungle in which the United States is under ubiquitous threat, not only from terrorists (number one) or powerful opposition states, but from clever trade partners and underperforming allies-unipolarity is but a waning memory, “America first” does not mean American leadership.

Second, in defiance of the theory of comparative advantage (and of Republican orthodoxy), Trump rejects “free trade” in favor of “fair trade,” which he defines solely in terms of a current account balance. Trade is not a “win-win” exchange of equal values but a zero-sum game the United States is losing. Thus, he rejected the Trans-Pacific Partnership (like Bernie Sanders and Hillary Clinton, who once called it the “gold standard”) and promised to renegotiate NAFTA and many other trade agreements on terms designed to bring home manufacturing jobs and capital investments.

This position has particular implications for Trump’s vision of relations with China. During the campaign, Trump vowed to label China a currency manipulator during his first day in office and to impose a 45 percent tariff on Chinese imports. US trade policy could force China to retreat from the South China Sea and induce it to rein in North Korea, he averred. This could be and indeed was read as a serious threat in Beijing, where Trump was taken more seriously than in many parts of the American political elite.

There are reasons why Trump’s blanket demonization of China proved to have electoral appeal. As in the case of Japan some three decades ago, the biggest chronic economic problem is that of a consistently ballooning imbalance of current accounts and trade. There has been a slight imbalance in China’s favor ever since China opened up, but this increased more rapidly after China entered the World Trade Organization in December 2001, thereby gaining immunity from unilateral US revocation of most favored nation (MFN) status to limit imports. In the fifteen years since China joined, it has consistently enjoyed extremely large trade surpluses with the United States, even after its overall trade surplus declined. From 2006 to 2016 China’s total exports fell 35 percent while imports rose, yet the US goods trade deficit with China rose from $83.0 billion in 2001 to $367. billion in 2015, an increase of $284.1 billion. US exports to China rose at a rapid rate from 2001 to 2015, but from a much smaller base, from $19.2 billion in 2001 to $116.1 billion in 2015.

As a result, China’s exports to the United States in 2015 were more than four times greater than US exports to China. US exports account for only around 7 percent of China’s imports and 5 percent of total US exports since the mid-2000s. China’s trade surplus declined during the global financial crisis but grew rapidly after the crisis; as of 2015 it represents 60 percent of the US current accounts deficit. Economists and politicians have sometimes attributed the consistent imbalance to “currency manipulation” (i.e., holding down the value of the yuan in order to gain a price advantage for Chinese exports).2 This was true for many years, but in response to American pressure on this issue (e.g., the then pending Schumer-Graham Bill, which threatened a 27.5 percent tariff on all Chinese imports unless China revalued its currency), China in 2005 instituted a “crawling peg,” allowing the value of the renminbi to appreciate incrementally within a narrow band. From 2005 to 2014 the yuan thus appreciated vis-a-vis the dollar by about 20 percent, temporarily interrupted by a People’s Bank of China peg during the financial crisis. In May 2015, the International Monetary Fund estimated that the currency was fairly valued, concluding that currency manipulation is no longer a major cause of trade distortion. Yet the trade imbalance has risen every year since 1985 and continues to rise, reaching US$367.17 billion in 2015 (83 percent of the US deficit or $531.5 billion, compared to 33 percent in 2008). Between 2008 and 2015, the US goods trade deficit with China increased $100.8 billion despite the global financial crisis and subsequent decline of the overall US trade deficit.

Despite frequent US complaints about this situation, which has resulted in the loss of as many as 3.4 million jobs to China from 1990 to 2010, while running the largest bilateral trade deficits in recorded history, countermeasures have heretofore been weak and ineffective. It is conceivable that Trump’s mercantilism was partly instigated by invidious comparison with China’s successful prior mercantilism (a tu quoque argument is not logically valid, but it can start trade wars, and that is the way Trump frames things).

The Trump “Playbook”

Trump appears to draw his foreign policy postures from an eclectic foreign policy playbook. He has embraced a number of selections from Richard Nixon’s repertoire in his approach to Asia policy. He adopted Nixon’s “madman theory”: the idea that in order to discombobulate an opponent it is sometimes useful to be unpredictable, irrational, even “mad.” But while it was somewhat difficult for Nixon to play madman because of his generally very calculated approach to decision-making, the stratagem fits well with Trump’s impulsive, flamboyant personality. The media have repeatedly complained of Trump’s lack of any coherent strategy, but this is fully consistent with his commitment to strategic surprise-if he has a strategy he will not reveal it (thus, for example, he promised to destroy ISIS without revealing how he would do so). So far, results have been mixed. On the one hand, some likely targets seem to have been sufficiently alarmed by Trump’s threats and unpredictability to make early pilgrimages to Washington (e.g., Merkel, Abe, Xi). On the other hand, Trump’s bridge-building to China and warnings of strategic impatience have not yet enticed Kim Jong-un to the negotiating table, provoking only a blustery spate of DPRK threats and counterforce demonstrations.

Another difficulty is that allies have also been equally flummoxed by Trump’s unpredictability. South Korea, in disarray as it prepared for unscheduled elections after the impeachment of Park Geun-hye amid the usual hyperbolic threats from the North, was stunned on April 27 by Trump’s call for them to pay for the Terminal High Altitude Area Defense System (THAAD-a system that the United States has been hastening to install-coupled with a demand for renegotiation of the “horrible” KORUS (Korean-US) FTA. This was a threat Secretary of Defense Mattis subsequently had to walk back. Domestically, Trump’s ad hominem, caustic, exaggerated, or otherwise inaccurate rhetoric has earned him the lowest public approval ratings this early in a first term of any president on record, provoking avoidable popular opposition to his policies.

Trump also seems to have triangular logic in mind. With reference to China, he appears to be adapting the Clinton “reset” with Russia as a counterbalance to China, thereby emulating the Nixon-Kissinger strategic triangular logic while turning it on its head. To Moscow’s dismay, however, Trump’s election has not been followed by a Russo-American reset or summit meeting. The uproar over Russian interference in the presidential election has sidetracked movement in this direction. Russian-US relations subsequently nose-dived due to that interference as well as the unchanging Ukrainian deadlock and Trump’s punitive bombing of Russian ally Syria following a gas attack on civilians. Trump has, however, never discarded the reset option, despite the skepticism of the contingent of former generals he has appointed, and is apt to revive it.

Trump also appears to have replayed the “Nixon Doctrine” first articulated at Guam in 1969, the essence of which is that Asian allies must look to their own defense and stop relying so heavily on American protection (the nuclear “umbrella” remained). The free-riding complaint, anticipated in more restrained language by Obama, was first made against NATO members. It was then directed toward US allies Japan and South Korea for inadequate financial support for resident US troops (Japan pays approximately 48 percent of costs for host nation support, South Korea 40 percent, making them the least expensive bases in the extensive American pantheon). Yet even before taking office, Trump called Abe and Park to assure them of American commitment to those alliances, and national security officials subsequently reassured both that the talk about allies paying their fair share could be ignored.

At the same time that Trump seems to have embraced the Realpolitik that enabled Nixon to negotiate unprecedented agreements with leading ideological opponents, he has explicitly cleared moral considerations from his foreign policy chessboard (excepting his punitive response to the televised gassing of Syrian children, which may have also had realist implications). In a break with tradition, Secretary of State Rex Tillerson did not attend the launch of the State Department’s annual and congressionally mandated human rights report. “In some circumstances, if you condition our national security efforts on someone adopting our values, we probably can’t achieve our national security goals,” Tillerson explained in a recent speech to the State Department. “It really creates obstacles to our ability to advance our national security interests, our economic interests.” The US State Department is thus preparing for a 26 percent cut in its budget (coinciding with a big boost in arms spending) that has fueled Democratic and Republican fears that the administration is downgrading the importance of foreign aid and diplomacy.

In addition to these Nixonian plays, Trump brings at least one unique quirk to the office: an obsession with “deals.” He deems himself a maestro in the “art of the deal,” the title of a book that made him famous and richer still. He has frequently opined that what America needs now is better deals. About the purpose of the deal he has always been extremely “flexible,” or transactionalist; in the business world, it is consensually assumed that the purpose was to make more money and there are multiple ways of doing that. His own career before delving into politics began as a real estate developer but meandered into architecture, casino impresario, “university” founder, author, reality TV entertainer, beauty pageant operator, purveyor of steaks and high-end apparel- indeed, what he called an “amazing” career. Now in politics, the declared purpose is to “make America great again,” a goal that for most people is far more ethereal and idealistic than a cumulative positive return on investment. But not for Trump. For Trump it is one thing, “America first,” which may be defined in terms of a small handful of variables-a positive balance of payments, a much higher growth rate, full employment, a crackdown on terror, illegal immigration, and crime.

The following depiction of Trump’s management style was compiled from his own words, three biographies, and interviews with staff and former staff:

Throwing people off balance: “He’s spent his entire life doing this,” says Trump biographer Gwenda Blair. “Super competitive, looking for the opening, the angle, the way to win … always get in ahead, throw everybody off balance, say you won, double down, insist, bully, charge ahead.”

His door is always open: That cliché was, and remains, true. Inexperienced staff who worked for Trump recall being amazed at the free and easy access they got to the boss. Now that he’s president, Mar-a-Lago members are amazed to be chatting with the commander-in-chief on everything from Reince Priebus’s suitability as chief of staff to that “crazy” guy Kim Jong-un.

“Creative combat”: “His theory,” says Blair, “is that it will bring out the best performance from [staff] if they’re extremely competitive and afraid they’re going to be fired.” A good number of White House staff assume they could be fired at a moment’s notice, given Trump’s history of cycling through campaign managers. Only a tiny fraction of employees-family chief among them-have reasons to feel safe.

Loyalty: Trump prefers to hire intensely loyal staff, and we’re seeing that now in the way he’s filling his White House (and excluding “Never Trumpers”). In a one-paragraph statement for this story, White House aide and former Trump-family employee Hope Hicks used the words “unbelievably successful,” “incredibly effective,” “great,” “leadership,” “ingenuity,” and “high energy” to describe her boss.

Delegation: “He’s more inclined to trust people” than many outsiders assume, says biographer Michael D’Antonio. Trump will “give them a lot of leeway with regard to their portfolio, and if they succeed pile on more duties.”

But … selective micromanagement: Trump is a micromanager on matters of style and reputation. And money. At the Trump Organization he personally signed relatively minor checks, and now in the White House he haggles over airplane contracts and plays theatre critic when his spokespeople go on TV.

Ruthless: Trump had two mentors: his dad Fred, who was ruthless, and his lawyer Roy Cohn, who was even more ruthless (Swan 2017).

Trump in Power

Trump’s critique of US China policy during the campaign focused on two aspects: economics and security. In practice they soon became merged, but we begin with economic and specifically trade policy, to which he devoted much of his attention.

Trump’s interest in extricating the United States from asymmetrical foreign trade deals was indeed manifest in his withdrawal from the Trans-Pacific Partnership (TPP) during his first week in office, as promised. To what extent the agreement, successfully negotiated among twelve Pacific Rim nations by October 2015 but not ratified, would improve US GDP growth remains controversial. The Peterson Institute predicted a .05 increase in GDP over the next twenty years while an econometric model conducted by a team of Tufts economists claimed a .05 decrease. But the TPP had been endorsed not primarily as a stimulus to the US economy but as an attempt to provide political economic leadership by writing the rules of international trade-to ensure that “countries like China [would not] write the rules of the global economy,” as Obama put it. “We should write those rules.” It was seen as a form of economic statecraft tacitly premised on the hegemonic stability theory idea that political leadership must be underpinned by providing followers such public goods as lender of last resort, open markets, and a stable currency. Thus, throughout the period of the Cold War, Japan and the newly industrialized Asian economies (Taiwan, South Korea, Singapore, Hong Kong) all enjoyed prolonged periods of trade surplus with the United States.

But Trump has a mercantilist propensity to look at foreign policy solely in terms of how much money the United States will make, without regard for political or strategic considerations. China understandably welcomed the US withdrawal from the partnership, and the outlook is now bright for China to assume a more prominent leadership role in economic integration efforts by responding to the widespread need for public goods, as Xi Jinping promised to do in his January keynote speech at the World Economic Forum in Davos. This might be done either within the framework of the ASEAN-sponsored Regional Comprehensive Economic Partnership (RCEP) that excludes the United States (still under negotiation), or even by joining the TPP in place of the United States, as Australian prime minister Malcolm Turnbull suggested in the wake of the US withdrawal. However, it seems unlikely that any Chinese assumption of economic leadership via multilateral FTA construction will be swift or immediate-it took eight years to negotiate the TPP.

Trump’s implementation of a more protective US trade policy would be led by three appointees: Wilbur Ross, a former billionaire investor in distressed assets appointed as secretary of commerce; Peter Navarro, a former economics professor at the University of California at Riverside (and author of Death by China: Confronting the Dragon-A Global Call to Action) as chair of a White House National Trade Council; and Robert Lighthizer, recently confirmed as United States Trade Representative. All of these appointments clearly signaled an approaching trade war. Yet within the first one hundred days the new team did not drastically change US trade policy; indeed, sanctions against China were conspicuously absent. The administration proposed to abolish, then to revise the North American Free Trade Agreement (NAFTA), invoked forgotten national security rules to justify a tariff on soft wood imports from Canada, launched an investigation to determine whether cut-rate steel and aluminum imports endangered national security (not aimed at China), and initiated a survey of those states with which the United States has a large trade deficit. Such measures do not go much beyond the antidumping measures Obama frequently imposed. Trump has not branded China a “currency manipulator” and the 45 percent tariff on Chinese imports has not materialized, to the dismay of his constituents.

Part of the reason for this is of course the shift from campaigning to governing: Bill Clinton criticized the G. H. W. Bush China policy and expressed skepticism about NAFTA in the 1992 presidential elections. In office, however, he dropped any attempt to reinforce human rights in China by threatening withdrawal of most-favored nation status after a year and pushed NAFTA and the establishment of the WTO through Congress. In 2008, Barack Obama also criticized NAFTA en route to winning the White House but then supported it and adopted the ambitious TPP with the Pacific Rim and the Transatlantic Trade and Investment Partnership (TTIP) with the EU (failing, however, to pass either).

As a novice office-seeker one can please the crowd with xenophobia, but once in office one has to have a foreign policy that cultivates an international as well as a domestic constituency. Trump, still new at the job, is experiencing a steep learning curve. Certainly, the nearly $400 billion trade deficit has always been uppermost in his mind and in the early months he issued recurrent dire warnings without actually doing anything. Among the things he learned, however, is that China is no longer trying to devalue its currency but actually trying to stabilize its value, so without further ado he dropped this campaign promise, as Obama had before him. With a four-to-one Sino-American trade imbalance with its largest customer (18 percent of Chinese exports went to the United States in 2016), China stands to lose much more than the United States in an actual trade war, and the Chinese were definitely alarmed, accepting for the first time commercial use of the Trump brand. But Chinese media also threatened stiff retaliation. There is no question that the United States would also be damaged, for example in the red-state heartland that exports grain to China, or in prices of low-end consumer imports, and that would hurt Trump-so no more talk of a 45 percent tariff.

Clearly, Trump the dealmaker was looking for leverage. On December 2, 2016, Tsai Ing-wen, president of Taiwan, called the president-elect to congratulate him. Of course China, in keeping with its diplomatic blockade of the pro-independence government, objected, but not too strenuously. After all, in May 2017 Tsai also made a courtesy call to Macron-the newly elected president of France-with no visible diplomatic repercussions. But in the poisonous postelection domestic political atmosphere, the exchange raised a minor furor. China experts pointed out that this had not been done before and that it violated the One China policy that anchored the three Sino-American communiques and put limits on political interactions by the United States with the island nation. The counterpuncher responded on Twitter: “Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into their country (the U.S. doesn’t tax them) or to build a massive military complex in the middle of the South China Sea? I don’t think so!” (Smith 2016). This provoked a medley of domestic responses neatly classifiable as left (against) and right (for), but Taipei now became nervous about being put in play- if Trump could drop the One China principle, maybe he could, for the right quid pro quo, also drop the Taiwan Relations Act. It also raised the bilateral temperature, as Xi Jinping let it be known that he was cutting all communication with the United States until Trump reaffirmed the One China policy. So, the Taiwan card was out of play.

Trump inherited two major security issues from Obama: one in the north (North Korea) and one in the south (the East and South China Seas). Obama warned Trump as he left office that North Korea would be “the most urgent problem” he would face, implicitly conceding the policy of “strategic patience” he had pursued since around 2010 had failed. The United States had never agreed with China’s claim based on “historic rights” to sovereign ownership of part of the East China Sea and some 85 percent of the South China Sea (vaguely defined), or with its hard line since around 2010 that these claims were “core,” “indisputable,” and nonnegotiable. Trump turned first to North Korea, presumably due to Obama’s urgent warning. Moreover, in his 2017 New Year’s address, Kim Jong-un promised to develop an ICBM capable of hitting the continental United States by the end of the year. “It won’t happen,” Trump tweeted. Secretary of State Rex Tillerson, in his March 2017 maiden trip to Tokyo, Seoul, and Beijing, announced that “the era of strategic patience is over,” refusing to take a preemptive attack off the table. But the new administration soon learned that a preemptive strike would be very risky. Throughout his campaign Trump had repeatedly contended that China could easily force North Korea to the table, and now he challenged them to do so: “China will either decide to help us with North Korea, or they won’t. If they do, that will be very good for China, and if they don’t, it won’t be good for anyone” (Barber, Sevastopulo, and Tett 2017).

Meanwhile the maritime dispute between China and its neighbors, and indirectly with the United States as the putative patron of the rival claimants, continued. In the East China Sea, China claims the Senkaku or Diaoyu Islands, five tiny islets about a hundred miles from Taiwan that Japan has occupied since 1895. China began publicly disputing Japanese ownership in 1970, when a UN exploratory commission discovered rich subsurface petroleum deposits, but sharply escalated the tension in 2012, when Japan purchased three of the islands from their private owners in an abortive attempt to take them out of nationalist play. Japan’s position is that its sovereignty claim is “indisputable,” and that the sale had no effect on sovereignty; China called it nationalization. Riots erupted in over 200 Chinese cities. China drew baselines around the islands to formalize its ownership claim and began patrolling their territorial seas. The United States has taken the somewhat quizzical position that it is neutral on ultimate sovereignty but that as the islands are under Japanese jurisdiction they are included the Japan-America Mutual Defense Treaty. Yet China has continued to escalate its intrusions-in 2016 Japanese fighters scrambled a record 730 times, more than twice a day, to intercept Chinese overflights, and more than fifty Chinese vessels plied the territorial waters. China apparently maintains this routinized brinkmanship as an expression of sovereignty. In the South China Sea, China’s strategic posture is analogously forward: after an assertive push in 2013-2015 to expand the surface of the seven Spratly Islands it occupies by some 3,000 acres by dredging sand from the surrounding seabed, then to outfit the islands with lighthouses, airstrips, docks, antiaircraft artillery, and other defensive arms, China has moved to consolidate its gains. Thus, China may now even finally sign a binding code of conflict (under negotiation for the last twenty years). The United States has no territorial claim to any of this “blue-water territory” in either the East or the South China Sea but has sided with China’s rival claimants, one of which (the Philippines) has a security alliance with the United States, standing on the UN Convention on the Law of the Sea (UNCLOS) as defined in the July 2016 Permanent Court of Arbitration (PCA) verdict that China’s claim to historic rights was legally unwarranted, and by sending periodic freedom of navigation operations (FONOP) naval vessels on voyages near the islands to challenge China’s claims. Neither the US declaration of solidarity with Japan nor its FONOPs in the South China Sea have either halted or reversed China’s advances.

Taiwan was out, tariffs were fraught-where was Trump to find leverage? On February 10, 2017, he called Xi and, at the latter’s request, reaffirmed US adherence to the One China policy. In the following weeks the first informal China summit was arranged at Mar-a-Lago (the Chinese would have preferred the White House) with the reported help of Henry Kissinger and Jared Kushner. Trump piled on the pressure in preparation for his first meeting with Xi Jinping. Setting the tone, he tweeted, “The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits.” The eighteen-hour “citrus summit” took place April 6-7, as much as six hours consisting of personal dialogue between Xi and Trump, interrupted by a punitive strike on Syria for its use of gas warfare, over chocolate cake. The main purpose was not substantive agreements, according to the White House, but establishing “a very great relationship,” and in this Trump claimed success: “I was a little surprised, we had a great chemistry, not good, but great,” Trump said. “I liked him and he liked me a lot.” He later reflected more somberly, “He loves China and he loves the people of China. I know he would like to be able to do something, perhaps it’s possible that he can’t.” The two agreed to continue Obama’s Strategic and Economic Dialogue in expanded form and to begin intensive 100-day talks (later expanded to 365 days) to discuss both righting the trade imbalance and the East Asian security imbroglio. By early May the two teams had reached their first “early harvest” trade deal, which Trump hailed as “gigantic.” Under the ten-point deal, China will lift its ban on US beef imports (put in place following the outbreak of mad cow disease in 2003). American liquefied natural gas (LNG) exporters and foreign-owned financial service providers will also have better access to the Chinese market; in return, Washington agreed to allow Chinese cooked poultry exports into the country. True, many of China’s concessions had been made before, there is no enforcement mechanism, and the deal failed to address reciprocity and many other issues, but Wilbur Ross promised much more to come-this was only the beginning. Symbolically, it marked a lifting of a cloud of suspicion that had constrained the bilateral relationship for the past decade and arrested talk of a trade war, if only provisorily.

The deal also seemed to move the two sides toward a more closely coordinated position in the confrontation with North Korea. While in the presummit phase Trump was all about the trade imbalance, following the meeting, he raised North Korea to top priority. “I think that, frankly, North Korea is maybe more important than trade,” he said in a CBS interview on April 31. “Trade is very important. But massive warfare with millions, potentially millions of people being killed? That, as we would say, ‘trumps’ trade.” And despite a Wilbur Ross attempt to walk back that statement, Trump’s subsequent actions indicated he was indeed staking great hope on the impact of China’s intercession. To Xi, he publicly offered more lenient trade consideration and other concessions if Xi helped him solve the DPRK issue, and he followed through. “Why would I call China a currency manipulator when they are working with us on the North Korean problem. We’ll see what happens!” Trump tweeted on April 16. Moreover, he vetoed the navy’s request to send another FONOP naval voyage into the South China Sea, and he dismissed any talk of a follow-up phone call to Tsai Ing-wen (with whom an arms deal was temporarily deferred). To North Korea, Trump threatened war: “There is a chance that we could end up having a major, major conflict with North Korea. Absolutely” (Adler, Holland, and Mason 2017). Again he sought to force China to choose between continued protection of its client and a US military intervention: “If China is not going to solve North Korea, we will. That is all I am telling you” (BBC News 2017).

And the effect on China’s Korea policy was immediate, at least rhetorically. In an April 18 editorial, the usually fiery nationalist Global Times announced that “North Korea has a direct conflict of interest with China’s national strategic interest,” and that “the scope of cooperation between China and the United States is expanding.” Noting that the United States had threatened military action and “it seems that this is not just a verbal threat,” the editorial warned, “it is estimated that Beijing will agree to resort to the severe means of bringing down North Korea’s entire economic activities, such as stopping the majority of oil exports to the DPRK. If the United States implements the financial blockade, Beijing will likely agree to cooperate.” This threat was unprecedented. China would, however, “never support or cooperate with the US in taking military action” (Global Times 2017a). The North Korean news agency KCNA responded on April 21 that a “neighboring country” had abandoned the DPRK and was now collaborating with its enemy, warning that unnamed country that “if it miscalculates the DPRK’s will … and insists on economic sanctions against North Korea, it may get some appreciation from the DPRK’s enemies, but it must prepare mentally for the disastrous consequences of (ruining) its relationship with the DPRK” (Korean Central News Agency 2017).

On April 24 Trump called Xi again. To Trump’s entreaties that China do more to solve the problem, Xi now responded, “China absolutely opposes any action in contravention of the UN Security Council resolutions, both sides should exercise restraint and avoid doing things that exacerbate tensions on the Korean peninsula” (Buckley 2017). On April 28, Global Times accordingly published another editorial in which it beat a retreat, explaining that many still considered the DPRK a useful buffer, that it offered leverage against South Korea and Japan, and that “China does not have much of a bargaining chip to pressure the U.S. and South Korea. We need to be very clear with the U.S. and South Korea that China is not the key party in resolving North Korea nuclear issues” (Global Times 2017b). At the UN Security Council meeting in late April, China pushed back against a US attempt to encourage other countries to strengthen sanctions against the DPRK, instead urging that existing sanctions be enforced. Yet Chinese customs data indicate that Sino-DPRK trade rose 18 percent in the first quarter of 2017 over the same period last year (Reuters 2017). This is “normal” unsanctioned trade, but, meanwhile, forensic examination of the wreckage of North Korean missile debris indicates that Chinese firms have been involved in sourcing foreign components for North Korean missiles.

At this point, having evidently reached the limits of how far he could push Xi to squeeze the North, Trump shifted from sticks to carrots. On May 1, he revived a casual campaign offer to meet with Kim. “If it would be appropriate for me to meet with him, I would absolutely,” he said. “I would be honored to do it. If it’s under … the right circumstances. But I would do that” (Borger 2017). The “circumstances” remain unspecified at this stage, but would no doubt include at least a freeze of nuclear and missile tests. Beijing expressed enthusiastic approval; it had been pushing talks for some time. In interviews Trump expressed growing respect for the young dictator, a “smart cookie”: “Not many 27year-old men could go in and take over a regime … say what you want, but that’s not easy-especially at that age” (Blake 2017b). And on May 13, a top North Korean diplomat, Ms. Choi Sun-hee, said Pyongyang would be willing to meet with the Trump administration for negotiations “if the conditions are set” (Telegraph 2017). Of course if talks are now held, whether they can settle the issue more definitively than the Six-Party Talks held in 20032009 nobody knows.

What happened? Two things: First, the North Korean warning of “disastrous consequences” may have had some impact. After all, Beijing is only 587 miles across the Bohai Gulf from Pyongyang, and while North Korean missiles cannot yet hit the continental United States, they can likely reach Beijing. Although DPRK missiles are presumably aimed westward, no one can play madman like the young dictator who executes errant relatives with antiaircraft artillery, and the Chinese do not trust Kim Jongun. But, more basically, upon coming home from Mar-a-Lago, Xi faced a more skeptical correlation of forces: Jiang Zemin’s holdover appointees on the Standing Committee still support the DPRK’s strategic utility, as does the People’s Liberation Army, Xi’s political base; and the northeastern provinces benefit economically from bilateral trade amid a slowing Chinese economy. Thus Beijing reverts from “helping” the United States to a balancing position, urging both to calm down. Meanwhile, North Korea nonchalantly continues missile tests on April 4, 15, 28, and May 14, climaxing with the ICBM test July 4. The North learns from each test and the missiles are getting progressively larger, longer-range, and more capable. Pyongyang promises to continue testing both nuclear bombs and missiles “at the maximum pace” (Asia Times and Reuters 2017).

As of now, this small, ostracized, and impoverished country has defied both the United States and China and, having conducted five nuclear tests so far and numerous missile tests, it is well on the way to developing missiles capable of raining nuclear cataclysm upon its neighbors and, if it meets its young leader’s timetable, by year’s end, upon the US mainland as well. Kim will not rest until he has an invulnerable second-strike capability, which is in view within the next decade. How will things change in the region when he has achieved that? There are at least two views. The first is, not very much, which is premised on the assumption that Kim’s intentions are simply survival facing an asymmetric threat from a country that has conducted “regime change” in Iraq and Libya. The second is that Kim will threaten his neighbors with impunity, deterring US retaliation with nuclear blackmail, and that likely victims will hence be required to acquire their own nuclear weapons, leading to nuclear proliferation in South Korea, Japan, and possibly Taiwan. Both are possible and nonexclusive. The North already has an effective nonnu- clear deterrent and behaves with impunity. Confronting this quandary for the first time is South Korea’s new president, Moon Jae-in, who was elected in part based on a promise to remove THAAD and reintroduce the Sunshine Policy of Kim Dae-jung and Roh Moo-hyun, including such ventures as the Kaesong Industrial Complex. These plans for North-South opening, in normal circumstances benign, are entirely inconsistent with the Trump strategy of using intensified sanctions to bring the DPRK to the negotiation table.


What can we conclude after the first quarter of Donald Trump’s China policy? Trump came into office as China’s most trenchant and outspoken American critic and, after only a few months, he professed a great friendship with Xi Jinping, whom he called a “great guy.” With one weekend of face-to-face diplomacy in the Miami sun he seemingly turned US China policy around and refocused from the competitive to the more cooperative aspects of the relationship. Yet aside from the atmospherics, how much has really changed?

First, the atmospherics, what Hegel once called the “spirit” of the event, if it has truly changed, is significant in itself. It lifts the lengthening shadow of opprobrium and mistrust that Obama had placed on China since his disappointing first visit to China in 2009 and that had thereafter continued to build, based on a gaping trade imbalance, the cooling domestic investment atmosphere for US businesses as China seeks to upgrade its domestic industry, the US critique of China’s more assertive claims to its near seas, growing friction over China’s reclamation and militarization of surrounding islands, the clash of views over the PCA verdict, China’s ambiguous patronage of the DPRK, Xi Jinping’s stringent crackdown on domestic freedom of speech, press, and assembly, and so forth. This seems to have wafted away, at least for the moment, to China’s presumed relief. The United States sent a delegation to the Belt and Road Initiative (BRI) conference, and the many China hawks and skeptics in Asia are left without great power patronage. Yet we do not yet know whether the spirit of the opening will be as lasting as the Nixon visit. Trump’s political position in the United States is even more tenuous than Nixon’s. The 2016 election was so fiercely contested and so stunning in its outcome that resistance continues in the form of frequent demonstrations and a vigilantly critical commentary by much of the mainstream media that magnifies the impact of Trump’s many postelectoral missteps, holding his popularity rating much lower than might normally be expected for an incoming president. And this aura of suspicion and contempt may dim the popularity and sustainability of his foreign policy initiatives as well.

Moreover, how solid is the achievement? Trump’s China policy had two goals: first, to rectify the chronic current account imbalance, which, since China’s entry into the WTO, has grown to epochal magnitude; and the second was to staunch China’s challenge to the security status quo in East Asia. The first problem engendered radical proposals from Trump on the campaign trail such as branding China a currency manipulator and imposing a 45 percent import tariff. The citrus summit deal marked the beginning of serious fresh negotiations to right the trade imbalance, essentially by opening the Chinese market to more US imports, since the Chinese do not want to cut exports and the United States has been politically unable to hike import tariffs. The two sides agreed to set aside an intense 100-day period for intensive negotiations to enhance US imports, and a deal was already reached the following month for the Chinese to permit beef imports and US credit cards, in return for US imports of cooked poultry. This will not do much to correct the imbalance. But it is “early harvest” and optimistically one can say it is the beginning of a process. It may be a long process. Trump wanted 100 days, but already that has been expanded to 365 days. The beef import and credit card deals had been promised last September. There is no enforcement mechanism.

With regard to security, Trump inherited the threat of North Korea’s nuclear and missile program’s moving toward secondstrike capability in the north and China’s more active claims to maritime territories in its near seas in the south. Based on Obama’s warning, Trump prioritized the North Korean situation and tried both threats of military intervention and the invocation of sanctions as his initial menu of solutions. The meeting with Xi was based on the premise that sanctions, which have been employed off and on since the 1990s, could be made to work, that they had hitherto been leaky, and that China was the biggest leak. But together with tightened sanctions, Trump put the option of forceful intervention back on the table, warning Beijing that if China could not solve the problem, the United States would act alone. It was at this time that China raised its own threat level to unprecedented heights: North Korea’s actions violated China’s national interests, China might curb the sale of oil and bring the DPRK economy to a standstill, the United States would invoke secondary sanctions, and China would cooperate. Then the DPRK responded in effect by accusing China of betrayal and threatening dire consequences. Upon Xi’s return to Beijing, everything reverted to the status quo. Xi advised Trump to desist, China had no leverage over the North, this was a dispute between the North and the United States and the South, the two should calm down and negotiate. With mounting frustration, the Trump administration has begun to escalate sanctions on the North while upbraiding China for failure to solve the problem.

This article is not concerned with solving the North Korean nuclear issue but only with US-China interactions over this issue, and here the interesting finding is that only when the United States threatened unilateral force against the North did China become serious about the implementation of crippling sanctions. When that threat vanished and Trump shifted from sticks to carrots and offered direct negotiation with the North, the bilateral economic relationship returned to normal. Now that an invitation to Kim is on the table, the most likely eventual outcome is a resumption of talks culminating in another deal with the North for some form of freeze. But Trump is likely to escalate with threats and secondary sanctions first, to Beijing’s likely displeasure.

On security issues to the south in the East and South China Seas, Trump represents a retreat from the Obama position in two ways. First, he has withdrawn the United States from the TPP talks without offering any alternative multilateral framework to integrate the Asia Pacific around common economic rules or values. Second, the Obama pivot or rebalance has been abandoned, despite reaffirming the US defense commitment to its Asian allies, which is shaky mainly because of Trump’s own campaign statements. Trump has reached out to Thailand and the Philippines, ostracized by Obama for human rights concerns. But the United States attended China’s BRI Conference, bilateral talks continue, and the well-publicized Xi-Trump friendship relieves Chinese foreign policy of the US challenge to its recent assertive turn in its maritime policy. Those countries that see themselves adversely affected by that assertive turn, such as Taiwan, Vietnam, Japan, or the Philippines, have been left to fend for themselves.

The Trump China policy as it has evolved so far invites comparison to the Nixon opening to China in the 1970s. As in Nixon’s February 1972 “week that changed the world” in Beijing, we see that personal “chemistry” between top leaders can change a great deal quickly. In the attendant Nixon Doctrine, Vietnamization proceeded and US forces on forward bases and in the Pacific were reduced to 100,000 men, reducing the security threat to China; after the Florida summit, US naval forces have been withdrawn from maneuvers in the Southwestern Pacific and no longer challenge China’s fortified presence there. China’s BRI got an American thumbs up. Talk of a trade war was put on hold. It is true that the empirical foundation of this new era is very weak, as is the Trump presidency. The early harvest trade deal is thin, and the attempt to force a solution to the North Korean problem remains unsuccessful at this point. But in retrospect this can also be said of the “week that changed the world.” Recall that there was no diplomatic recognition in 1972, no explicit deal on Vietnam or Taiwan; the only empirical result of this historic meeting was a press communique without formal binding power. The big difference today is the political context: China is feeling far more strong and confident than in 1972 and its realistic ambitions are now great, aspiring to lead the region into a new “community of common destiny” (mingyun gongtongti), meaning a shared security community under Chinese leadership. On the other side, much of the US electorate feels an acute sense of loss and foreboding at this prospect. Trump’s attempt to build on a shared threat in North Korea may “not work out.” Thus we must, as Trump says, “wait and see.”