Trump’s Bad Deal With China
The early signs suggest Xi Jinping will run the table at Mar-a-Lago.
Trump will meet this week with Chinese President Xi Jinping at Mar-a-Lago, the sprawling Florida resort he’s branded the “Southern White House.” In comments and tweets ahead of the summit, the U.S. president has signaled it will be a “very difficult” meeting because he will go after China’s aggressive trade policies and seek to hold Beijing to account for failing to crack down on North Korea. Over the coming months, Trump may be about to learn some harsh lessons in foreign policy deal making.
For starters, this meeting will occur before the Trump administration has had time to undertake a full Asia policy review, or develop a coherent strategy for the region. It’s hardly surprising that just 70 tumultuous days into its term, the Trump team hasn’t done so. But, failing to develop a holistic strategy before hosting a summit meeting with Xi is grossly irresponsible—and it risks giving China the upper hand.
First, Trump’s transactional approach could cede the initiative to the Chinese, who will come to Mar-a-Lago with detailed lists of demands based on their years of experience navigating the U.S.-Sino relationship.
Perhaps more significant, the summit has the potential to cement the impression that America’s Asian strategy is built around a great-power arrangement between the United States and China. Secretary of State Rex Tillerson, unfortunately, sent that message during his recent trip to the region, when his adoption of longtime Chinese talking points caused great concern among America’s Asian allies. Returning to the same script in Florida would raise deeper questions about the Trump team’s basic intentions.
Then there is Trump’s apparent eagerness to make “better deals” with Beijing. Negotiating with a great power like China is not at all like making a real estate deal, even a very complex one. China is patient. Because Trump’s deal making relies on short time horizons and a highly compressed definition of interests, his major power “transactionalism” is likely to produce poor results for the United States. For instance, if he trades a temporary “win”—greater Chinese investment in the U.S.—for a permanent diplomatic concession—U.S. recognition of Beijing’s “core interests” in Taiwan and the South China Sea—he would be giving away something of incalculable value for a few billion dollars. America’s Asian allies would likely be appalled, and doubts about the U.S. commitment to the region would only grow.
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In a stark departure from traditional American foreign policy,
Trump came to the White House prepared to narrow the terms of
engagement with China. On the campaign trail, he used China as a
political prop and was quick to use heated rhetoric on issues that
seized him. He argued that China’s trade and currency policies were
“raping our country” and claimed that Beijing could single-handedly stop
North Korea’s quest for nuclear weapons. His advisers, including Steve
Bannon and Peter Navarro, have seldom missed the chance to portend a
bilateral military and economic clash. At times, however, the president
has also had kind words for Beijing, suggesting
that the U.S. and China could “push their bilateral relations to new
historic heights.” He has also demonstrated little interest in or
commitment to issues of international order in Asia. On the South China
Sea, for example, candidate Trump was quick to criticize the Obama
administration for doing too little to stop China’s aggressive
island-building campaign. Since the election, however, top U.S.
officials have hardly addressed it. And Trump and son-in-law Jared
Kushner’s China-related business dealings may give the new president
personal incentive to find ways to accommodate Beijing.Nowhere has the administration’s instinct to bargain been more evident than in its treatment of Taiwan. In early December, Trump broke 40 years of diplomatic protocol when he took a phone call from the president of Taiwan. Shortly thereafter, he argued that the long-standing “One China” policy—in which the U.S. recognizes that there is only one China, but is deliberately ambiguous about which one—was up for grabs unless Beijing made concessions of its own, calling out its behavior on North Korea, in the South China Sea, and on currency policy. Trump’s initial tweets on China suggested he was looking to seize early leverage against a competitor. China’s leadership has long considered Taiwan to be a fundamental sovereignty issue, however, and Xi refused to take a phone call with the new U.S. president until he reaffirmed that One China still stood. Trump’s attempt to gain the upper hand proved to be for naught, however, and the readout of his first phone call with Xi suggested that the deal-maker had been outmatched. While the White House claimed the “president always gets something” after walking back his previous tweets questioning the One China policy, it remains quite unclear what it achieved, other than a phone call from Beijing and a visit to Florida that will play well for Xi at home. For a White House prone to tooting its own horn, this hardly looks like a clear win.
Tillerson’s forays into China diplomacy have been just as puzzling. During his trip to Beijing in March, the secretary’s prepared remarks parroted diplomatic language that is often used by the Chinese to describe the bilateral relationship. Tillerson’s talk of “mutual interests” and “win-win” cooperation was lifted almost verbatim from remarks Xi gave in 2013, and raised suspicions among American China experts. The language itself is quite anodyne, but has come to imply a form of great power condominium, or a “G2,” whereby the United States and China strike bargains with one another without the participation or buy-in of other regional powers. If implemented, it would be a stark departure from long-standing U.S. strategy for the region, which seeks to embed China within Asia as opposed to defining our Asia policy within the contours of relations with Beijing. A G2 approach would be deeply troubling to U.S. allies, as it creates the impression of deferring their interests to Beijing’s. And it would actually weaken our leverage over China, as it has the potential to decrease the regional pressure on Beijing during a crisis. Since January, Kushner has been the primary point person on China policy. He reportedly favors accommodating Beijing, and may have pushed for this language.
As the summit has approached, Trump has signaled the kind of transaction he’s looking for from China. On March 30, he took to Twitter to announce that the meeting would be difficult “in that we can no longer have massive trade deficits and job losses.” The message was clear: Xi better come prepared to make concessions that will allow Trump to claim that he reduced the deficit and protected jobs. There was, of course, no mention of any of the other major issues in the bilateral relationship. Indeed, the tweet seems to treat the encounter as a one-off bargain, and not as a relationship at all.
What’s so bad about that, one might ask? First, it ignores any shadow of the future, as it seeks to make only quick gains. This may work famously in real estate but is a poor fit for international politics, where there are multiple actors and issues constantly evolve over long time horizons. It is hard to know what exactly the administration is hoping to extract from Beijing, but chances are good that it involves achieving some concession on trade and job-related issues, as well as renewed pressure on North Korea.
But China could easily outfox Trump. Let’s say Xi agrees to crack down on North Korean banks or Chinese companies that do business with Pyongyang. But what happens if Kim Jong Un conducts another nuclear test? Beijing might not be willing to impose additional wide-ranging penalties. At that point, it will be up to China to decide whether the initial bargain applies under new circumstances. Beijing has committed to take a firmer line on North Korea in the past, and even voting on United Nations resolutions to do so. But promising is not the same thing as delivering, and China has demonstrated a keen ability to uphold commitments to the letter while undermining them in spirit. A one-shot deal won’t leave Trump with much power if they repeat this behavior. Meanwhile, the U.S. might be giving up something of lasting value.
Focusing only on a few narrow issues, moreover, gives Beijing license to maneuver in the areas Trump does not prioritize. For example, the administration has made almost no mention of issues relating to the international order—in Asia, this means the South China Sea, regional institutions like ASEAN and multilateral trade. Indeed, there is little sign that Trump takes an interest in any of these, making them useful bargaining chips for Beijing.
The trouble is, these are some of the most critical agenda items for America’s allies and partners in the region. For the better part of 70 years, the United States has worked with partners like Japan and South Korea to increase regional trade, champion democratic institutions and promote a regional order in which states remain free from economic coercion and military intimidation. This wasn’t altruism; it has allowed American interests to advance as its partners grew in strength. American influence in the region is, after all, predicated on countries wanting us to remain a Pacific power in the first place. If the administration appears to be ignoring or abandoning them, those allies will have fewer reasons to support the U.S. position in the region.
Moreover, in just its first 10 weeks in office, the Trump administration had already done considerable damage to America’s regional standing. In the final few months of the Obama administration, Asian partners had grown concerned about the U.S. commitment as it became clear the United States would not pass the Trans-Pacific Partnership. The Trump team, however, withdrew from TPP in its first days in office, took a bullying tone with close allies and has failed to exercise leadership on the South China Sea. In the capitals of long-time allies Australia, South Korea and the Philippines, and critical partners such as Singapore and Vietnam, pressure is increasing to distance their politics and their security ties from a White House disinclined to promote their interests. This will, in turn, give them more cause to tilt toward Beijing—and quicker than you might think. In just a year’s time, these concessions could result in widespread support for RCEP—China’s multilateral trade agreement—the passive acceptance of China’s further militarization of its Spratly Island bases, and less willingness by American partners to support the United States politically and militarily.
U.S. regional leadership has endured in Asia for decades because it is positive-sum, allowing regional states to make gains while also benefiting the United States. If American leadership in international institutions, on trade and on multilateral disputes disappears, so too will regional states’ desire to support Washington. China is by no means ready to assume the role of leading regional hegemon in Asia, but its economic and military might will still allow it to take up plenty of space, and it will not be eager to renegotiate its status as a regional leader four years from now.
Trump’s focus on cutting a narrow deal with Xi could also undermine his own goals. China might agree to impose harsher penalties on North Korea, but if Trump is opaque about the terms of his deal making, U.S. allies will be less willing to work with the United States to reinforce deterrence or to coordinate an economic pressure campaign. Beijing may make an offer that allows Trump to claim he has reduced the trade deficit, but that won't stop China from dumping steel in U.S. markets or compel it to make its business climate any friendlier toward U.S. businesses.
Of course, Trump could change course at any time if he felt China had broken its end of the bargain. If he does, the voices of hawkish, economic nationalists like Bannon and Navarro could gain strength and drive another set of policies altogether, courting economic and perhaps even military escalation. The president’s own instincts and the weight of recent evidence suggest, however, that the transactional approach is likely to prevail—at least for now.
When Xi arrives in Florida, he will be prepared to make demands and draw inferences that will shape the bilateral relationship for the next four years, if not longer. He will pay keen attention to what the Trump team prioritizes—and doesn’t—and adjust his strategy accordingly. And if Trump focuses narrowly on securing a few quick tactical wins, he’ll be departing from a broader, bipartisan approach that has served the United States extraordinarily well in Asia for 70 years. Without a broader Asian strategy, and a holistic approach to China, Trump will find himself reacting to changing circumstances from an ever-weaker position in the region—while Beijing reaps the rewards.
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