The anti-China blaze of hostility Donald Trump started may sink trade talks

(Originally published here in South China Morning Post.)

If it was US President Donald Trump alone calling the shots from above during last week’s negotiations with Chinese Vice-Premier Liu He, we’d be reporting this week about the preparations for a summit with President Xi Jinping next month.

That meeting looks doubtful since the latest round of trade talks in Washington broke down, a development that surely weighs on Trump despite outward appearances. No one can deny that the US leader feels a certain kinship with the world’s most autocratic leaders. To see him interact with the likes of Xi, Vladimir Putin and Kim Jong-un is to see minds meld over the art of political order.

Even as trade negotiations broke down, the US leader had kinder words for Xi than he will ever have for any American leader – Democrat or Republican – who won’t put Trump’s priorities above all else. Spinning the outcome of the Washington talks as a step forward, Trump asserted that his relationship with Xi is “a very strong one”.

Beijing engaged in a bit of its own spin, largely aligning with Trump’s assertion that the two sides are making progress, even though Beijing appears to have rejected several key demands, including an inventory of laws and regulations that it must revise. The Chinese Communist Party is about as likely to concede to that demand as Pyongyang is to host the next Burning Man.

Under the current circumstances, we should expect more confrontation like the tweets Trump sent over the weekend, accusing China of making a play to the Democrats in the hope that such a move would ensure an end to the current trade conflict after the 2020 presidential election.

The accusation is off-base. Beijing is all too aware that Democrats aren’t inclined to pedal softly on this front. They might even make reconciliation more difficult. They would lock arms with the European Union against China more readily than Trump’s party.

Meanwhile, Trump’s broader foreign policy undercuts his ability to apply maximum pressure on China. He started a bonfire of anger against China in 2016, a tactic that helped usher him into the Oval Office.

His focus on the bilateral trade imbalance misapprehended and misrepresented the intricacies of global supply chains, but his instincts were spot on.

The US corporate sector had finally had enough of the restrictions Beijing’s regulatory authorities put on foreign companies trying to operate there.

Many labour union voters, hoodwinked into thinking China was responsible for all the US factory jobs that disappeared in recent decades, abandoned their traditional support for Democrats in 2016.

But the fire that Trump started has grown over the past three years into a blaze that he can’t contain, pushing some US lawmakers and pundits to rhetorical extremes. FBI director Christopher Wray, for example, has portrayed China as public enemy No 1. Taken together, these warnings amount to a new “yellow peril” alert.

As the searing anti-China rhetoric echoes throughout Washington, Trump can no longer decide for himself how much Beijing needs to bend to end the current stand-off.

And it will be a while before he’ll be able to bask in the pageantry of Xi’s leadership, a world of pure adulation and fealty.

Now we’re stuck in stand-off mode because China acceding to what Washington wants is politically unacceptable to Xi and virtually impossible within the time frame Washington wants, owing to the limits of the country’s legislative calendar.

Here’s where the implications of Trump’s other instincts – a disdain for multilateral agreements and Washington’s traditional alliances – may undercut the success he appears to be enjoying as he sticks with his hard line against Liu.

In his first order of business as president, Trump pulled out of the Trans-Pacific Partnership, a symbol of multilateralism and cooperation with allies. That move signalled the start of a scorched-earth policy towards Washington’s traditional geopolitical orientation.

Xi may withstand the political fallout from any damage that a trade war escalation will inflict on his economy. Caving in to US demands is the more politically perilous option.

However, confronting the US as a member of a new bloc that changes the dynamics of trade throughout the region would have changed the equation, and the new calculus might have given Xi political cover to make enough concessions to the US to halt the trade war.

If Trump’s party wants to win the trade war, they should use the anti-China blaze that the president started to negotiate back into the TPP.

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