Trump’s Trade War Making China Great Again
Donald Trump's trade war is helping China expand its diplomatic influence.
In addition to the expected economic impact, it also appears that the President’s trade policies have had the effect of increasing Chinese influence and prestige around the world:
Since trade tensions between the United States and China began to soar this year, China’s markets have lost 20 percent, its currency has wobbled and exports have decelerated.
But China is gaining something else: friends.
Under pressure from President Trump’s tariff war, China has embarked on a charm offensive on the diplomatic circuit, smoothing over old disputes and courting partners who could help Beijing weather the storm with Washington. Germany, which perennially harangued Beijing over market access restrictions, recently let Chinese investors hold bigger shares in joint ventures in a significant concession. South Korea, the target of withering Chinese boycotts last year over its deployment of a U.S. missile defense system, is seeing Chinese tourism revenue and automobile sales return
This week, China’s relations with its heavyweight neighbor, Japan, reached its highest level in years. After meeting at a summit in Russia, Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe announced that China will welcome Abe on his first state visit to Beijing next month after he was frozen out for years over territorial disputes and the Japanese leader’s visits to a controversial shrine for wartime dead. The two men smiled for a photo together, a stark turnaround from four years ago, when they could barely face each other for a memorably grim snap.
During their meeting, Xi told Abe that the two countries should “firmly defend multilateralism, the free trade system and the rules of the World Trade Organisation to push forward an open global economy,” according to China’s state-run Xinhua News Agency. Later, a Japanese foreign ministry official told the Mainichi Shimbun that Japan could play a “mediating” role in the ongoing China-U.S. dispute.
Although Trump has yet to confront Japan as he has China, Mexico, Canada and the European Union, the United States’ most critical ally in the Pacific could be in his sights next. The White House has been weighing tariffs of up to 25 percent on autos and car parts, and the president said this month that he plans to tell Japanese leaders ”how much they have to pay“ — at the risk of straining the relationship.
The U.S. “strategic rivalry” with China has had other secondary effects. The People’s Liberation Army this month participated in Russia’s biggest military drills since the Soviet era, while Xi and Russian President Vladimir Putin sipped vodka at a summit in their latest display of brotherhood. The Global Times, a hawkish Chinese state-run newspaper, quickly pointed a finger at Washington.
“While China-Russia relations are well-developed, they both have a twisted relationship with a distant major power,” it said in an editorial. “Other countries should rethink why they can’t become good friends with Beijing and Moscow.”
To be sure, it’s not clear that China’s whirlwind diplomacy will lead to lasting alliances. Its disputes with neighbors such as South Korea and Japan often involve territory and are steeped in complicated, emotive history. Its frictions with the E.U. over technology sales and market access will probably outlive the temporary camaraderie of resisting Trump. It may now even be wooing India, but few foresee the two Asian rivals settling into an easy, enduring friendship.
All of this is happening, of course, at the same time that the President continues down a path that has served to drive a wedge between the United States and its most important allies. When the President visited Europe last year, for example, he left in his wake with many of our closest allies wondering just how committed the President was to the alliance and to its collective defense principles notwithstanding later assurances regarding that commitment on his part. Earlier this summer, the President revoked the exemption from the steel and aluminum tariffs that had been announced back in March that applied to American allies in Europe as well as Canada and Mexico. In doing so, Trump claimed that he was taking this action for “national security” reasons. Objectively speaking, of course, the idea that these allies are a national security threat to the United States, or that we could not rely on them as a source for aluminum and steel in the event of a national emergency or military threat is absurd. Needless to say, this didn’t go over very well with our allies in Europe and elsewhere. Canada’s Foreign Minister called the new tariffs “absurd,” for example, and European Union officials announced retaliatory tariffs against American goods. Things got even more bizarre in this regard as Trump exchanged harsh words with Canadian Prime Minister Justin Trudeau prior to the G-7 Summit. Once he was at the summit, Trump essentially did everything he could to alienate America’s closest allies, thereby seemingly achieving a goal that Russia and, before it, the Soviet Union had only dreamed of, driving a wedge between the United States and its allies. After the Singapore Photo Op Summit, Trump continued his tirade against Trudeau, while polling revealed that Canadian public opinion about the United States was suffering as a result of American actions and the President’s rhetoric. Finally, it was reported at the same time that the President was considering what would effectively be a ban on German-built luxury automobiles, a threat that he continues to make. One month later, of course, Trump met with Russian leader Vladimir Putin in Helsinki and proceeded to perform just as obsequiously as he had in Singapore during his summit with North Korean Leader Kim Jong Un. This meeting, of course, came in the wake of a NATO summit that was about as much of a disaster as you would expect it to be under Trump and a trip to the United Kingdom that didn’t go much better. In the wake of all of this, many of America’s closest allies have begun to question the extent to which they can rely on the United States to continue the leadership role as they have in the past.
I’ve noted in the past, see here and here, the extent to which this alienation of allies has arguably helped Russian President Vladimir Putin to at least partly achieve a goal that the leaders of the old Soviet Union, but it’s clear that it isn’t just Russia that has benefited from this seemingly conscious effort on the part of the Trump Administration to withdraw from the world. Both in response to the efforts of the United States to punish it economically through an ill-advised trade war, and in response to the fact that this President has spent the last year and a half wrecking our relationships around the globe, the Chinese appear to be stepping in and taking a more assertive role around the world. The most notable example of those noted above, of course, is the fact that China and Japan appear to be warming to each other in a way that would not have been likely prior to the rise of Trumpidian foreign policy. Add into this the fact that Trump decided very early on in his Administration to withdraw from the Trans-Pacific Partnership, an agreement that, among other things, was intended to act as a counterbalance to China’s rising influence in the Asia/Pacific region. That action alone created a power vacuum that Beijing seems all to willing to step in to fill.
So basically, Donald Trump is helping make China great again.