It’s the Deals, Stupid: Making Sense of Trump’s China Policies

Another week, another new China policy from President-elect Donald Trump. Scarcely a week after calling U.S. commitment to the One China policy into question with his December 2 phone call with Taiwanese President Tsai Ing-Wen, Trump told Fox News that he’d be happy to keep it — if China pays the price: “I fully understand the ‘one China’ policy, but I don’t know why we have to be bound by a ‘one China’ policy unless we make a deal with China having to do with other things, including trade,” he said on “Fox News Sunday.” This is only the latest of his foreign policy reversals: After criticizing the U.S. alliance with Japan and its military presence in Asia on the campaign trail, he made his first post-election foreign meeting with Prime Minister Shinzo Abe and promised an era of “peace through strength.” After spending half the past year imagining an isolationist Trump who abandons Asia and the other half mapping out his war with China, the average pundit must, by now, be seeking treatment for whiplash.

But take Trump on his own terms, and it’s clear that he’s got a plan: It’s the same old “Art of the Deal.” He doesn’t care about recognizing Taiwan, pulling U.S. troops out of Asia, or starting a trade war with China. Instead, he believes that if he can convince foreign leaders that he is willing to do any of these things, he can force them into a bidding war to shape his policy.

On the campaign trail, Trump framed his plans as negotiating positions rather than policy ideas, often concluding his descriptions of outrageous foreign policy proposals with some variation of the phrase, “Every time you want to make a good deal you have to be able to walk.” In fact, he seemed surprised and annoyed that people took his ideas literally — complaining at a June rally that he was described as being against free trade simply because he had said he would abandon at least two major free trade agreements: “They say, ‘Oh, Trump wants to stop free trade.’ I don’t want to stop free trade. I love free trade. But I want to make great deals. I want to take a deal that’s faulty — where we’re losing hundreds and hundreds of billions of dollars a year — and make it good.” Recklessness and provocation are central to Trump’s art. He will likely come into office threatening to provoke a series of crises, and then find the partner willing to pay the highest price to prevent them.

This approach is not the way the game is played, and it will distress and annoy his negotiating partners. But it will likely produce a deal. There are at least three possible partners with so much to gain from a U.S. president willing to bargain with core elements of U.S. policy that they will be able to overcome any offense caused by his personal style.

Drawing a Line Through the Western Pacific

China could offer Trump a very big deal indeed. If Chinese leaders can convince Trump to follow through on his isolationist impulses, they will have the opportunity to achieve long-sought strategic goals.

Beijing could ask Trump to end American arms sales to Taiwan and to forswear criticism of China’s human rights record — and, ideally, to withdraw American soldiers from Okinawa and South Korea. For Trump, who has demonstrated skepticism of the cost of alliances and demonstrably indifference towards human rights abroad, these would be small concessions. In return, China could offer to put the breaks on its military development and its land reclamation in the South China Sea, secure in the knowledge that absent a major American military presence it faces much diminished strategic threats and will eventually achieve its territorial goals. These offers would satisfy major U.S. strategic goals, allowing Trump to claim victory with the U.S. and Asian foreign policy communities.

On trade, Trump’s main area of concern, China could certainly grant Trump’s demand to end the practice of intervening in foreign exchange markets to depress the value of its currency — it has not done so for several years and is currently fighting to prevent the currency’s decline, a policy which aids American exporters. While China would need to generate additional concessions, the strategic gains Trump has put on the table are so great that a deal is likely.

Adding a T to the TPP

If Beijing doesn’t give Trump his deal, he could make it in Tokyo. Concerned about the rise of China — with which Japan has both an ongoing territorial dispute and a deeper sense of rivalry fueled by the legacy of World War II — the Japanese government is deeply committed to the U.S. alliance and could satisfy Trump’s demands even while advancing its own agenda. Notably, Prime Minister Shinzo Abe’s government has spent years on an effort to revise Article 9 of the Japanese constitution, which commits the country to pacifism. If Abe can convince opponents that the U.S. alliance will collapse without Japan’s remilitarization, he could satisfy Trump’s demand for greater contributions to defense while accomplishing his own goal of developing Japan as a military power. Furthermore, it is entirely possible in this scenario that Trump will wind up passing the TPP.

While Trump made opposition to the TPP a centerpiece of his campaign, his objections have focused on a few fairly narrow issues, such as the import of American beef and cars. For Abe, who has talked about structural reform but has faced stiff resistance entrenched interests in the Japanese economy, making some key concessions to Trump could be an opportunity to take on the farm or industrial lobbies. If Tokyo can offer Trump the opportunity to boast about bringing back jobs from abroad, it is entirely possible that he will throw his support behind a modified TPP and a strengthened U.S. alliance system more explicitly targeted at China.

Trump to Moscow

The most provocative possibility is that the new president-elect could find in Russian President Vladimir Putin the partner he needs to make a truly big-league deal concerning American foreign relations. Under sanctions from Western countries since invading Crimea in 2014 and sponsoring the rebel movement in Eastern Ukraine, Moscow’s political isolation has made it uncomfortably dependent on China. In return for political cover, Putin has made a series of concessions to Beijing, including reaching a deal on natural gas pricing on Chinese terms and joining Beijing in military exercises around its disputed maritime claims. Perhaps the greatest indignity has been tolerating Xi’s “one belt, one road” initiative, which is an explicit plan to make China the economic hub of Central Asia, a region Moscow considers its own backyard. Faced with American leaders he perceived to be implacably opposed to his rule and interested in encroaching upon Russia’s natural sphere of influence, Putin has had little choice but to accept a role that looks increasingly like the vice presidency of the club of powerful autocrats — an embarrassing role reversal from the overbearing Soviet partnership with China that led to the Sino-Soviet Split and eventually to Richard Nixon’s 1972 mission to China.

Putin’s support for Trump during the campaign suggests that he sees a way out of this corner: Personally well-disposed to the Russian leader and little concerned with Ukrainian sovereignty or Syrian rebels, Trump could be an opportunity for Putin to achieve a dramatic reconciliation with the United States that would allow Russia to distance itself from Beijing. This would not be the first time Putin has made this move — following the 9/11 attacks, Putin broke with the pattern of Russian and Chinese opposition to American intervention by reaching out to George Bush and offering support for the invasion of Afghanistan, a move which Beijing took as a betrayal. A U.S.-Russia partnership would be established on the basis of a joint effort to fight ISIS, but Putin would likely also attempt to draw Trump’s attention to warnings of a China threat, seeking to draw the United States — if not Russia — into a rivalry that would entangle both Washington and Beijing for the foreseeable future.

Will It Work?

Trump’s bomb-lobbing style of negotiations will be popular with neither the American foreign policy community nor his potential partners overseas. Nonetheless, his flexibility presents a golden opportunity to foreign leaders who would like to shape the United State’s policy in Asia — and it is unlikely he will be able to say no to a deal. Trump’s reputation, his campaign platform, and perhaps his identity are founded on his unique ability to reach deals that other politicians can’t. In his previous career, he demonstrated an enormous bias toward action: His history of pursuing ill-conceived business ventures, ranging from trying to sell steak at an electronics retailer to committing his name and reputation to a small-time education con, paint a portrait of a man unable to let go of an opportunity even if the risks far outweigh the rewards. Even if his foreign counterparts are initially suspicious, they will eventually recognize that the new American president’s need to reach a deal exceeds his ability to evaluate the terms — at least one will take the chance to win concessions no other American president would grant. It’s impossible to predict what Trump is going to do in Asia, but in scale it will almost certainly be “something terrific.”

---

David Cohen has written about Chinese politics and society as a journalist and editor of the Jamestown Foundation China Brief. He is now finishing an MA at Stanford.