Media Coverage | January 24, 2017

What Will U.S.-China Relations Look Like Under Trump?

Firestein, who oversees the institute's Asia-Pacific Program, talks to Diplomat as part of a series of discussions on U.S-China relationship for the next four years.

Below are some of Firestein's comments:

Donald Trump is now the president of the United States. What will his presidency mean for U.S.-China relations? Given that Trump was elected with a mandate to “do things differently,” predictions of sharp, decisive changes in U.S. policy toward China – and growing difficulties in this most consequential bilateral relationship – abound. I think we will see both change and continuity – and probably more continuity than generally anticipated.

On trade, the Trump administration will likely adopt a tougher course in a number of ways, but I don’t think it will change the foundational architecture of the commercial relationship. Within the WTO framework, the United States will likely press China harder on trade cases, IPR infringement, and the exfiltration of commercially valuable proprietary data (aka, cyber-enabled economic espionage); and it may continue to make noise about China’s currency policy (read:  “manipulation,” in the view of some in the administration). But I don’t think the fundamental dynamics of the trade relationship will or can change quickly. If President Trump manages merely to slow the growth of the massive U.S. annual trade deficit with China – a deficit that reached a billion dollars a day in 2015 – that will be a laudable achievement in itself. This won’t be as easy a nut to crack as it might have seemed to some during the campaign.

President Trump’s main specific goal as president is to “bring back” (or, in any case, create) millions of good-paying blue-collar jobs, particularly in the American heartland. The infrastructure sector, which figured unusually prominently in President Trump’s inaugural address, can be the key to that. And herein lies a real opportunity to transform the U.S.-China relationship, and U.S. perceptions thereof, in a fairly fundamental way. Specific ideas that I would encourage the Trump administration to consider are a possible bilateral infrastructure investment treaty (BIIT) with China; or more generally, a multilateral infrastructure investment liberalization agreement for the global economy (MIILAGE) and legislation aimed at streamlining foreign investment in U.S. infrastructure (e.g., a “Streamlining International Investment in U.S. Infrastructure Act,” or SIIUSIA).

Many are pessimistic about the prospects for U.S.-China relations under President Trump; at a minimum, I am more “cautiously pessimistic.” But actually, I would go even further: I think there is genuine upside potential in this relationship that can be realized under the new U.S. president and his Chinese counterpart. I am hopeful that, for the sake of our two peoples and the world, that potential will be recognized – and realized.

 

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