Commentary

Economic Ties May Not Be Enough to Prevent a Crisis in U.S. Relations with China

Analysts around the world are worried about the prospect that bilateral tensions between China and the United States could surge once Donald Trump takes office as the next U.S. president. Trump exacerbated those concerns when he took a congratulatory telephone call from Taiwanese President Tsai Ing-wen. In engaging in that conversation, Trump violated a strict protocol that had been in place for more than three decades. Since the United States switched its diplomatic recognition from the Republic of China (the official name of the noncommunist remnant based on Taiwan) to the communist regime in Beijing in 1979, there had been no official contact between the U.S. and Taiwanese presidents.

Yet China’s reaction was surprisingly restrained. Beijing did file a formal diplomatic protest, but otherwise Chinese officials acted as though Trump may not have been fully aware of the nuances surrounding the Taiwan issue.

To long-time observers of U.S.-China relations, this dance seemed rather familiar. China-bashing is frequently a staple feature of U.S. presidential campaigns. Bill Clinton, for example, railed against “the butchers of Beijing” as a way to criticize President George H.W. Bush’s handling of the Tiananmen Square bloodshed and its aftermath. Yet once Clinton took office, little changed in the substance of U.S. policy toward China.

The expectation was that the same would hold true despite Trump’s fulminations throughout the presidential campaign about Beijing’s trade practices and currency manipulation. The telephone conversation with Tsai shook those complacent assumptions slightly, but only slightly. After all, China and the United States remain crucial economic partners. Bilateral trade figures confirm the importance of the relationship. U.S. exports to China totaled $116.072 billion in 2015, while imports from China were a whopping $483.244 billion. In addition, China is the U.S. government’s second largest foreign creditor, holding more than $1.157 trillion in U.S. Treasury debt.

One cannot overstate the importance of such extensive ties as a restraint on rash actions by either power. Neither China nor the United States should rationally wish to see a confrontation develop with a crucial economic partner. But we should also be aware of the limits of economic links as a restraining factor. Germany and France were each other’s principal trading partners in 1914. That did not prevent them from going to war and unleashing horrific destruction that exceeded the importance of any of the underlying substantive disputes.

That is because inflated strategic calculations and just matters of national pride overrode rational economic calculations. Something similar could happen today, but the incoming Trump administration seems blissfully unaware of the danger. For example, following the telephone conversation with Tsai, the Trump camp made matters worse by referring to her as “the President of Taiwan,” instead of her official title, “President of the Republic of China.” Chinese officials don’t like either title, but the former really sets them off, because it gives the impression that Trump is embracing the language of extreme Taiwanese secessionists.

Shortly thereafter, Trump adviser Stephen Moore further escalated tensions. He stated that if Chinese officials didn’t like Trump talking to Taiwanese leaders, “screw them.”

Trump himself soon poured more gasoline on the flames. In an interview with Fox News, he asserted bluntly that the United States was not bound by the One China policy that had guided previous administrations. He charged that Beijing had been unhelpful on the North Korea nuclear issue, had routinely engaged in unfair trade practices, had manipulated the value of its currency to the disadvantage of American producers, and had made outrageous territorial claims in the South China Sea. Because of those actions, Trump stated, the United States should not feel obligated to recognize the One China policy, and he implied that Taiwan’s status could be a valuable bargaining chip for Washington.

China’s response this time was more ominous. China’s foreign minister, Cui Tankai, warned that sovereignty was not a bargaining chip and no Chinese government would ever view it in that fashion. Although that position could apply to other issues, including Beijing’s territorial claims in both the East China Sea and the South China Sea, it applies with special vehemence to Taiwan’s status.

For the first time since the rapprochement that Richard Nixon and Henry Kissinger orchestrated in the early 1970s, an incoming U.S. president seems to be considering translating the China-bashing rhetoric of a presidential campaign into actual policy. Some of the more hawkish Trump advisers appear to take the position that if the United States merely shows “sufficient resolve”—even on the hot-button Taiwan issue, Beijing will simply back down. According to that happy scenario, the economic relationship continues—only on better terms for the United States.

It is possible they’re right. But given the nationalist emotions involved, not to mention the strategic/military stakes in China’s immediate neighborhood, it is unlikely that Beijing will back down even over such issues as the East China Sea and South China Sea. It is even less likely that Chinese officials and the Chinese people will do so regarding Taiwan. Trump and his advisers are charting a very dangerous course, and the current bilateral economic links may not be enough to save them from their folly.

Ted Galen Carpenter is a senior fellow at the Cato Institute.