The relationship between the United States and China is one of the most important bilateral relationships in today's world. Could it be headed for significant change in light of the new presidential administration? Professor Zhiqun Zhu, international relations and political science, explores what could be next for U.S.–China interactions, and how they may affect citizens of both countries.
Q: Can you explain the importance of the U.S-China relationship, not only in terms of trade, but by other measures as well?
A: President Donald Trump's campaign and his new administration have focused on the economic dimension of the relationship. That's very important, because the U.S. and China are each other's top trading partners, but it's a multifaceted relationship that covers many other areas as well.
U.S. companies have moved a lot of jobs to China, but China also creates jobs here through trade and investment. A Rhodium Group report found that Chinese firms invested more than $100 billion in the U.S. from 2000 to 2016, which created several hundred thousand American jobs, most since 2010. Chinese investment in the U.S. surpassed U.S. investment in China for the first time in 2015. Ten years ago, there was very little Chinese investment in the West, so this is something new that will continue to grow rapidly if the new administration welcomes it. For example, Jack Ma of Alibaba met with Trump and said he can help create 1 million jobs. China also has a lot of experience in upgrading infrastructure, another top priority of the Trump administration. Cities like Detroit could benefit enormously from Chinese investment.
The relationship also has political, strategic, cultural and societal dimensions. Nearly one‑third of international students in the U.S. come from China. More than 300,000 Chinese students study here each year, including more than 100 at Bucknell. American students are also going to China in increasing numbers.
Strategically, North Korea's nuclear program is a complex and common challenge. If the U.S. and China do not cooperate, North Korea will continue to challenge international security. The U.S. and China have also worked together to address climate change, and if Trump decides to depart from the previous policy, U.S.–China cooperation on the issue will evaporate.
Q: Trump has made numerous comments that indicate a willingness to institute a tariff on Chinese imports to address a trade deficit. Do you think he will follow through?
A: By its nature, trade does not guarantee that everybody wins or wins equally. There will be losers and winners of varying degrees, but imposing tariffs will hurt consumers on both sides.
However, this might be Trump's negotiating strategy to force compromise on certain issues. While a tariff on some Chinese exports is likely, I doubt he will impose it across the board. In addition to not working and triggering retaliation from China, it would also reflect very poorly on the U.S. because it's against World Trade Organization rules, which stipulate that you need to go through the WTO to solve trade problems, not impose tariffs. More importantly, it doesn't solve the fundamental structural problem. China did not steal jobs from the U.S. American companies moved them, and increasingly, these same companies are moving out of China to places like Thailand, Indonesia, the Philippines and Vietnam, where there's even cheaper labor.
Q: Based on all of these factors, what changes to trade policy might occur under Trump, and how would they affect U.S. consumers?
A: Unless he actually does start a trade war through tariffs, I don't think any changes will affect American consumers. The two economies have become so highly interdependent that any punitive measures against one side will end up hurting the other.
But remember, it's not just about trade. During his inaugural speech, Trump repeated "America first" and "make America great again" several times. That's fine, as all leaders want to make their countries great, but that's not the type of speech you would expect from a U.S. president. America is different. This is the "city on a hill" and an example of all these lofty goals of freedom and democracy. With the U.S. pulling out of the Trans-Pacific Partnership (TPP) and only wanting to engage in bilateral trade talks, it is basically giving up global trade leadership. Viewed from outside, the U.S. is retreating from globalization, which is discomforting and disappointing.
Globalization is a trend that cannot be stopped. Both China and the U.S. have benefitted from it, but according to Trump, the U.S. is a loser. Some people may have lost their jobs, but overall it's hard to argue against globalization. For those who were left behind, it's a problem that perhaps these nations can work together to fix.
Q: President Trump recently said that he will abide by the long-standing One China policy. In light of his phone call with the Taiwanese president, do you think he could change his mind, and if so, how could that potentially affect U.S.–China relations and Taiwanese citizens?
A: Trump may have thought he could negotiate on this issue by treating Taiwan as a bargaining chip. However, China and Taiwan don't see it that way, and I suspect he may have come around in a short timeframe. It was always doubtful that the new administration could or would change this longstanding bipartisan policy. Trump may be a maverick, but this is really the foundation of the U.S.–China relationship. He was likely staking out his negotiation position, but from China's perspective, there's nothing else to negotiate if the U.S. moves away from One China. Trump seems to now understand this sensitive issue, and the U.S. will continue to maintain a robust "unofficial" relationship with Taiwan under the One China framework.
This is not the first time a U.S. president or candidate has tried to use Taiwan to get more out of China. Ronald Reagan said he would recognize and establish diplomatic relations with Taiwan, but that didn't happen. Instead, he built a strong and constructive relationship with China despite his very anti‑communist and pro‑Taiwan stances. Trump hasn't gone any further than Reagan at this point. For the Taiwanese people, they don't really want to interrupt the status quo because in reality Taiwan is de facto independent. It has its own government, military and passports, but just isn't recognized as an independent state, and a disruption of the status quo would only hurt the Taiwanese people.