(Originally published here in South China Morning Post on September 17, 2019.)
In the US Democratic debate last week, Beijing should have taken note that the only candidate who appeared willing to negotiate an end to trade tensions with China, Julián Castro, is polling far behind the front runners. The rest voiced support for punitive tariffs against China in some form. And then some.
“The problem isn’t the trade deficit, the problem is they’re stealing our intellectual property,” said Joe Biden, who’s currently leading the pack of Democratic contenders. “The problem is they’re violating the [World Trade Organisation]. They’re dumping steel on us.”
Taking aim at China’s industrial policy and overcapacity should make it clear that Beijing’s preferred approach to ease tensions with Washington through more purchases of US goods won’t placate whoever will move into the White House if Donald Trump loses next year’s election.
And even though Castro says he’s keen to end the trade war, he’s also looking to ratchet up the pressure against China over Beijing’s treatment of its Uygur minority in Xinjiang province.
If the fact that Trump is Beijing’s best friend in Washington wasn’t clear to President Xi Jinping before the most recent round of Democratic Party debates, it should be now.
Never mind Trump’s bluster about forcing US companies to “find alternatives to China”. That was so last month. Everyone knows that Trump’s negotiating strategy is an alternating pattern of contradictory positions, without a shred of political or ideological conviction behind any of them, meant to keep opponents guessing.
Beijing has struggled to come to terms with Trump’s shoot-from-the-hip approach to diplomacy. So has every other American foe and ally, as well as many leading figures of Trump’s own Republican Party.
But the economic stakes are highest for China, and it’s possible that Beijing has now decided that sweeteners might be better than a wall of resistance when it comes to the way forward with Washington, regardless of how much this will agonise the government’s propaganda machine.
Just hours after the Democratic debate in Houston, Xinhua announced the Chinese government’s decision to exclude US soybeans and other agricultural products from punitive tariffs levied in retaliation for the trade war Trump started last year.
State media said the move was a response to Trump’s decision to postpone an increase in the tariff rate on US$250 billion of Chinese goods from October 1 to October 15.
China’s response was asymmetrical. It knocked the tariff rate on soybeans, America’s largest single-commodity export to China in terms of value, down from 33 per cent to 3 per cent in exchange for a pledge by Trump to delay an increase on Chinese imports from 25 per cent to 30 per cent. China freed American farmers held hostage in the trade war, while Trump gave up what amounts to a rounding error.
Trump’s recent switch back to a friendly stance towards Beijing almost certainly factored into China’s decision to give American farmers a reprieve.
But the realisation that Trump may be the only thing stopping an American foreign policy shift that would seek to align with every ally from London and Brussels to Canberra and Tokyo, in a bid to force China to open its markets, is probably the more pressing motivation.
Trump, who kicked the legs out from under the traditional free-trade-oriented centre of the Republican Party, will take his boot off their throats in due time, once he can claim victory in the trade war.
As Trump sees it, business between America and China should be humming once the trade balance is less skewed in China’s favour. The plight of Uygurs in “re-education camps” against their will should not stand in the way of a relationship that has enriched shareholders of many American Fortune 500 companies for decades.
To be sure, the Democrats have stepped back from their hard-line rhetoric towards China before. Back in the 1990s, for example, presidential candidate Bill Clinton, who lashed out at then president George H.W. Bush for “coddling dictators from Baghdad to Beijing”, oversaw a huge expansion in Sino-US economic integration once he took office.
But the political mood in the US about China has changed dramatically since the Clinton administration. In the eyes of the average American, China went from being inconsequential to a job-destroying, intellectual-property-stealing Leviathan.
China has no better friend than Donald Trump in today’s America, and Beijing knows itThat perception helped propel Trump into the White House, and the Democrats haven’t forgotten.