Trump’s trade package with China has been a bust. Instead of achieving changes in China’s barriers and rules, the administration opted for state-directed trade. But with three-fourths of 2020 over, China has fulfilled less than one-third of Trump’s sham contract. Moreover, Trump’s deal left out almost 40 percent of U.S. exports — and China’s purchases of those goods actually fell by 30 percent. As former national security adviser John Bolton revealed, Trump gave up sanctions on Chinese technology firms when China offered to restart politically sensitive farm purchases; even given this, Trump’s trade conflicts forced him to spend $28 billion to compensate U.S. farmers. He also stuck Americans with an annual bill for higher taxes on $350 billion of purchases from China. Last year, Moody’s Analytics estimated that Trump’s trade war with China has resulted in 300,000 fewer jobs being created in the United States.
The administration’s fear of China has led it to imitate Beijing, sabotaging America’s premier strength: fair, innovative and competitive markets governed by the rule of law. The shenanigans over TikTok signal to the world that Trump wants political control over companies and investments in an economy in which executives must pay political favors to win the blessing of the White House court. Trump’s barrage of threats about sanctions, export controls, investment screening, doing business abroad, visas, supply chains — echoed by warnings from the attorney general and the FBI — risks disguising intimidation with the rationale of national security.
Trump’s security policies match his economic bumbling. His on-off affair with Kim Jong Un of North Korea highlights his fascination with image over substance. Trump idolizes authoritarian strongmen and disdains democratic leaders. He threatens to cut off alliances with South Korea and Japan unless they fulfill his whims. He treats America’s soldiers like mercenaries for hire. Trump transfers defense funds to his wall against Mexico instead of investing in new technologies and weapons to deny China’s domain in the sea in the event of conflict. Nor can Trump grasp how economic ties can boost security. He trashed the Trans-Pacific Partnership, which would have deepened economic ties with 11 friends while advancing economic rules that China needs to respect.
Trump has no interest in human rights. His acolytes think that throwing out journalists, shutting down a consulate and imposing sanctions on Chinese officials show strength. Instead, the United States signals fear and weakness. China cannot compete with America’s appeal as an open society.
The United States can compete successfully with China, which faces huge economic, demographic, health and environmental problems. China’s global bullying offers opportunities for deft, not daft, diplomacy. For example, the best way to challenge China’s intimidation in Hong Kong would be to open freedom’s door to the people of Hong Kong.
America’s competitive strength begins at home. The United States should be a magnet for people, ideas, innovation, investments and trade. America’s internal arguments — for example about the #MeToo and Black Lives Matter movements — spark global debates. When a democratic America overcomes problems, the country shines as a beacon.
The United States needs to draw others to our side by listening, offering respect and prodding action in pursuit of common interests. “America First” should not mean America alone. Countries around the Indo-Pacific want the United States to compete with China, not to pretend to contain it. While China has been working within international organizations to advance its national interests, the United States has been disengaging, and occasionally stomping away in frustration.
The United States should be the world’s leader in biological security; inclusive economic growth; environmental safety; cybersecurity, data privacy and digital opportunity; nonproliferation of weapons of mass destruction; and fostering free societies. That agenda can rebuild the Atlantic alliance; the combined weight of America and Europe can push back against China.
But there’s also room for cooperation with China. Trump ceded the fight, retreating through decoupling and state-directed trade. But the United States should be insisting on reciprocity through rules. For example, China’s new intellectual property courts are finding for foreigners most of the time, but the penalties are too low. China needs to boost the costs. The best solution for forced transfer of technology would be to end China’s joint venture requirements. China’s state-owned enterprises will prove to be economic losers, but the rest of the world should insist on rules for competitive neutrality, backed by retaliatory actions.
Trump and his minions rant about a new Cold War, but they are woefully ignorant of how the United States succeeded in the old Cold War and how China differs from the Soviet Union. They have drifted toward a lose-lose strategy: The United States and China can hurt each other — but to what end? Trump masquerades hostility as strategy.