China should be vigilant in light of Trump’s protectionist comments to Congress, experts say

US president displaying neither friendship nor weakness, but is constantly testing Beijing’s bottom line, says trade expert

PUBLISHED : Wednesday, 01 March, 2017, 2:45pm
UPDATED : Wednesday, 01 March, 2017, 11:23pm

US president Donald Trump’s latest accusation that China is causing massive American factory closures should be a signal for the Chinese to be vigilant, mainland trade experts say.

During his first address to the Congress on Tuesday, Trump announced plans for massive military expansion, reiterated his stance against terrorism, called for a “merit-based” immigration system and pledged a threefold increase in new infrastructure.

In particular, he again described how international trade had damaged the US economy, and talked of imposing taxes and tariffs on other countries’ imports to strengthen America’s trade position, without giving details.

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“We’ve lost more than one-fourth of our manufacturing jobs since NAFTA was approved, and we’ve lost 60,000 factories since China joined the World Trade Organisation in 2001,” he told the Capitol.

“Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes – but when foreign companies ship their products into America, we charge them almost nothing,” he said.

Having heard that, Huo Jianguo, vice-chairman of the Ministry of Commerce’s China Society for WTO Studies, said Beijing should be mentally and practically prepared for the coming trade friction with the US, which was only a matter of time and scale.

Unilateralism and protectionism had been the central concept of Trump’s view on trade, as well as his voter base, said Wang Huiyao, president of the Centre for China and Globalisation and an adviser to the State Council.

“China’s contribution to the creation of new US jobs and to maintaining low consumer prices for years has been ignored by him,” said Wang. “And this has been his long-held idea.”

Although his ideas and personality has never changed, Trump has in fact displayed significant flexibility in terms of dealing with China, such as making no moves on his highly publicised policies during his election campaign such as slapping a 45 per cent border tax on Chinese goods or declaring China a currency manipulator, Huo said.

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He also stepped back and reaffirmed to president Xi Jinping the US commitment to the one-China policy, which he originally indicated might be up for negotiation.

“He isn’t showing friendship, nor weakness. He has been constantly testing Beijing’s bottom line,” Huo said.

After his telephone conversation with Xi two weeks ago, Trump yesterday met state councillor Yang Jiechi, who is likely to organise a face-to-face meeting of the two leaders.

Keeping contact while making complaining in public was also a negotiation tactic of the “dealmaker” Trump, Huo suggested.

As Trump continued to assess and shape his trade policies, China should increase contact and communication with his administration but be willing to take the trade fight to the Americans without sacrificing the relationship, he said.