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DEAL OR NO DEAL
Whether Trump and Xi reach some short-term accommodation in
Buenos Aires is anyone’s guess. There are substantial divisions within
the Trump administration and no policy process to adjudicate them.
As a result, the White House has neither an agreed-upon bottom line
nor a clear negotiating strategy. Bilateral negotiations have been
flailing in fits and starts, leaving China guessing what might
ultimately satisfy Trump.
On most issues of consequence, there is simply no overlap between
Xi’s vision for China’s rise and what the United States considers an
acceptable future for Asia and the world beyond.
The meeting in Buenos Aires may well fail to curb the president’s
appetite for more tariffs on China. Over the last year, the Trump
administration has substantially hardened its policies and rhetoric
toward Beijing. Consider, for example, Vice President Mike Pence’s
blistering speech at the Hudson Institute in October, in which he
accused China of a litany of economic, political, and military
misdeeds. Pence continued his strident tone while substituting for
Trump at Asia’s annual regional summits in mid-November. The vice
president openly mocked Xi’s signature foreign policy program, the
Belt and Road Initiative, declaring that the United States, by contrast,
does not “offer constricting belts or a one-way road.” In the meantime,
the Trump administration has stepped up pressure on Beijing with a
series of indictments and financial penalties to blunt China’s illegal
and unfair trade practices.
All that said, it is widely known that Trump is of two minds on China.
Even as the president reiterates his long-standing belief that China
has “cheated” and “plundered” the United States, no one should be
surprised if he chooses to make a deal, declare victory, and go home.
By earning symbolic and politically salient concessions, Trump could
minimize short-term risks to U.S. markets while claiming that he
alone finally stood up to Beijing.
The contours of such a deal are well understood. Trump would agree
to hit pause on any new or higher tariffs. In exchange, China would
pledge to purchase more U.S. goods (including soy beans and
liquefied natural gas), while issuing promises to enhance Chinese
market access for U.S. products, further open its financial sector,
better protect intellectual property, and reduce joint venture and
technology transfer requirements.
Any burst of goodwill, however, will be short lived. Xi and the ruling
Chinese Communist Party are incapable of addressing the United
States’ fundamental concerns over China’s industrial policies and
state-led economic model. Because of this, any process to settle these
issues is bound to fail. Even if tariffs are put on hold, the United States
will continue to restructure the U.S.-Chinese economic relationship
through investment restrictions, export controls, and sustained law
enforcement actions against Chinese industrial and cyber-espionage.
At the same time, there are no serious prospects for Washington and
Beijing to resolve other important areas of dispute, including the
South China Sea, human rights, and the larger contest over the norms,
rules, and institutions that govern relations in Asia. Nothing Trump
and Xi agree to in Argentina will substantially alter this course.
DARE TO COMPETE
The United States should not shrink from strategic competition with
China. Analogies to World War I or the Cold War are imperfect and
misleading. Competition does not mean confrontation, much less
war. The United States should sustain dialogue with China to manage
potential crises and seek opportunities for cooperation on areas of
common interest, such as climate change. Washington’s focus,
however, should ultimately be on making the United States its best
and strongest self.
In that context, the China challenge presents a rare and essential
opportunity for U.S. political unity. It is imperative that Republicans
and Democrats build a bipartisan consensus on the issue. Both sides
of the aisle will have to make difficult compromises by approaching
divisive issues such as trade, defense budgets, fiscal policy, domestic
spending, and immigration at least in part through the lens of
enhancing U.S. competitiveness. Future U.S. administrations will
have to do a better job than Trump’s in leveraging the enduring
foundations of U.S. power, including its open society, commitment to
human rights, and powerful alliances and partnerships.
Garnering sufficient political support to compete successfully with
China will also require a clearer description of what’s at stake if
current trends continue and Washington fails to respond accordingly.
A China-dominated order would mean a United States with weaker
alliances, fewer security partners, and a military forced to operate at
greater distances. U.S. firms would be left without access to leading
technologies and markets, and disadvantaged by new standards,
investment rules, and trading blocs. Inert regional institutions would
be unable to resist Chinese coercion, and the world would see a steady
decline in democracy and individual freedoms. The net result would
be a less secure, less prosperous United States that would be less able
to exert power in the world. For now, enhancing American
competitiveness to prevent this kind of illiberal Chinese sphere of
influence should be the cardinal aim of U.S. China strategy.
One day, it will be time to talk with Beijing about making a deal. But
that day will only come once China’s momentum has stalled and Xi or
one of his successors is no longer convinced that his country is on the
path to regional dominance. At that point, Trump’s upcoming
meeting with Xi will be long forgotten.