Trump will hardly push towards trade war against China

China Plus Published: 2017-08-21 14:37:35
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By George N. Tzogopoulos

While Sino-American relations are taking shape under the Trump administration, a recent decision made by the US President might cast a shadow over them. In particular, President Trump signed a memorandum asking Trade Representative, Ambassador Robert Lighthizer, to investigate China’s laws, policies, practices, and actions. Acting in consistence with section 302(b) of the Trade Act of 1974 Lighthizer is now instructed to possibly find out if Chinese tactics are allegedly unreasonable or discriminatory, harming American intellectual property, innovation, and technology. For its part, China expressed its serious concern about potential consequences of the presidential memorandum which was signed less than a month after the bilateral Comprehensive Economic Dialogue was concluded in Washington.

US President Donald Trump speaks during an event to sign a memorandum calling for a trade investigation of China, Monday, Aug. 14, 2017, in the Diplomatic Reception Room of the White House in Washington.[Photo: VCG]

US President Donald Trump speaks during an event to sign a memorandum calling for a trade investigation of China, Monday, Aug. 14, 2017, in the Diplomatic Reception Room of the White House in Washington.[Photo: VCG]

At first glance, perspectives for future trade cooperation between China and US are harmed indeed. The tone used in a White House fact sheet is aggressive against China stigmatizing the country for benefiting ‘from the theft of American intellectual property’. According to Washington’s position the national economy and American workers are critically influenced and the cost is estimated to be ‘as high as $600 billion a year’.

There are two main reasons explaining the decision of Trump to potentially order Lightizer to start an investigation against China. The first is revolving around his will to show to American people that he is keeping his relevant pre-election promise and is making a real difference from his predecessor Barack Obama. In August 2016, for instance, he had said that ‘enforcing intellectual property rules alone could save millions of American jobs’ and had directly targeted China. In theory, the US President is currently developing his ‘America First’ policy. It is not surprising that he signed the memorandum surrounded by company executives.

And the second reason refers to Trump’s motivation to distract attention from political difficulties he is encountered with. Apparent interactions between his team and Russia are only part of the story. The Charlottesville case further outlines how the US President can be further isolated domestically, or at least govern a completely divided country. Only a few days ago a Gallup’s poll showed him with just a 34% approval rating, his lowest since taking office in January, and a 61% disapproval rating.

Apart from the afore-mentioned two reasons, what is perhaps more interesting is to elaborate on the new steps in the aftermath of Trump’s decision. Although the scenario of a trade war should not be excluded, it remains highly unlikely. While Washington is framing the memorandum as a proof of its determination to protect the national interest against Beijing’s practices, Trump was careful to avoid a direct confrontation with China. As opposed to pressure exerted on him by some Senators to immediately proceed with sanctions against China, the US President selected the wait-and-see option. 

It can be taken for granted that the investigation will begin indeed. However, it is not clear whether this process will lead to trade actions against China. The Chinese administration could challenge the US action against it in the World Trade Organization. Also, bilateral consultations might be another outcome. Additionally, it cannot be anticipated how long the investigation will last. The Washington Post, for example, asserts that it ‘could take up to a year to conclude’. Should this happens, the days of the result will almost coincide with the ones of the 2018 mid-term election during which the American political landscape will be further fragmented. 

Within this context, Trump is probably gaining time. Even though he is now the US President, his previous experience as a businessman needs to be remembered. Trump understands that Chinese countermeasures in the case of a trade war will damage the American economy to an unprecedented degree. Hence, he will be the first to refrain from pushing the button towards this direction. This said, he perhaps only seeks to bargain with the Chinese administration in supporting his foreign policy agenda regarding North Korea. This agenda is substantially based on a leading role to be assumed by Beijing in bringing Pyongyang to the negotiations table. On the very same day Trump signed the referendum, US Secretary of State Rex Tillerson and Defense Secretary James Mattis co-authored an opinion piece in The Wall Street Journal about North Korea reiterating the American argumentation. 

All in all, unilateral actions do not help the Sino-American partnership. In spite of his unpredictable character, Trump believes generally in the significance of friendly consultations and dialogue.  That is why – after the memorandum – he authorized Chairman of the US Joint Chiefs of Staff Joseph Dunford to go to China where he met President Xi Jinping at the Great Hall of the People.  Prudence has also to mark Sino-American economic relations burying the trade war possibility. 

(Dr George N. Tzogopoulos is a senior research fellow and advisor for EU-China relations at the Centre international de formation européenne, Nice/Berlin.)

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LU Xiankun Professor LU Xiankun is Managing Director of LEDECO Geneva and Associate Partner of IDEAS Centre Geneva. He is Emeritus Professor of China Institute for WTO Studies of the University of International Business and Economics (UIBE) and Wuhan University (WHU) of China and visiting professor or senior research fellow of some other universities and think tanks in China and Europe. He also sits in management of some international business associations and companies, including as Senior Vice President of Shenzhen UEB Technology LTD., a leading e-commerce company of China. Previously, Mr. LU was senior official of Chinese Ministry of Commerce and senior diplomat posted in Europe, including in Geneva as Counsellor and Head of Division of the Permanent Mission of China to the WTO and in Brussels as Commercial Secretary of the Permanent Mission of China to the EU. Benjamin Cavender Benjamin Cavender is a Shanghai based consultant with more than 11 years of experience helping companies understand consumer behavior and develop go to market strategies for China. He is a frequent speaker on economic and consumer trends in China and is often featured on CNBC, Bloomberg, and Channel News Asia. Sara Hsu Sara Hsu is an associate professor from the State University of New York at New Paltz. She is a regular commentator on Chinese economy. Xu Qinduo Xu Qinduo is CRI's former chief correspondent to Washington DC, the United States. He works as the producer, host and commentator for TODAY, a flagship talk show on current affairs. Mr. Xu contributes regularly to English-language newspapers including Shenzhen Daily and Global Times as well as Chinese-language radio and TV services. Lin Shaowen A radio person, Mr. Lin Shaowen is strongly interested in international relations and Chinese politics. As China is quite often misunderstood in the rest of the world, he feels the need to better present the true picture of the country, the policies and meanings. So he talks a lot and is often seen debating. Then friends find a critical Lin Shaowen criticizing and criticized. George N. Tzogopoulos Dr George N. Tzogopoulos is an expert in media and politics/international relations as well as Chinese affairs. He is Senior Research Fellow at the Centre International de Européenne (CIFE) and Visiting Lecturer at the European Institute affiliated with it and is teaching international relations at the Department of Law of the Democritus University of Thrace. George is the author of two books: US Foreign Policy in the European Media: Framing the Rise and Fall of Neoconservatism (IB TAURIS) and The Greek Crisis in the Media: Stereotyping in the International Press (Ashgate) as well as the founder of chinaandgreece.com, an institutional partner of CRI Greek. David Morris David Morris is the Pacific Islands Trade and Investment Commissioner in China, a former Australian diplomat and senior political adviser. Harvey Dzodin After a distinguished career in the US government and American media Dr. Harvey Dzodin is now a Beijing-based freelance columnist for several media outlets. While living in Beijing, he has published over 200 columns with an emphasis on arts, culture and the Belt & Road initiative. He is also a sought-after speaker and advisor in China and abroad. He currently serves as Nonresident Research Fellow of the think tank Center for China and Globalization and Senior Advisor of Tsinghua University National Image Research Center specializing in city branding. Dr. Dzodin was a political appointee of President Jimmy Carter and served as lawyer to a presidential commission. Upon the nomination of the White House and the US State Department he served at the United Nations Office in Vienna, Austria. He was Director and Vice President of the ABC Television in New York for more than two decades.