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China-US relations

Trump jeopardising relations with China

Beijing’s patience is not infinite and it does not see wisdom in linking North Korea’s nuclear ambitions with bilateral trade

PUBLISHED : Friday, 01 December, 2017, 1:43am
UPDATED : Friday, 01 December, 2017, 1:43am

For someone who claims to have a warm personal relationship with his Chinese counterpart, US President Donald Trump has gone out of his way to pile pressure on Beijing over a range of geopolitical and trade conflicts. If he is not careful, the prospect of a trade war – perhaps even a real war on the Korean peninsula – cannot be entirely discounted. Just weeks after Trump’s state visit to China, the US Commerce Department has launched an anti-dumping investigation into the import of aluminium sheeting from China by claiming suspected illegal or unfair state subsidies. There are already ongoing probes into China’s subsidies in the steel industry and intellectual property practices.

The latest move is seen as particularly hostile in that it was not launched in response to complaints from the concerned US industry, but by the department on its own initiative. This rarely happens against a major trading partner. Only two instances are on record: a case launched in 1985 against Japanese semiconductor imports and a 1991 probe against Canadian timber. In those cases, however, the issue was about trade with a close ally. With China, it’s against the backdrop of a much larger multidimensional chessboard. Geopolitics and domestic politics are both in play.

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As a candidate, Trump had promised to act tough on China. But he has not followed through, at least according to his far-right base, having failed even to label China a currency manipulator. The latest trade threat will appeal to American nationalists and anti-globalisation advocates, who are among his most hard-core supporters. It follows on the heels of sanctions against several mainland companies for allegedly trading with North Korea. Just this week, Trump has announced new sanctions against Pyongyang following the latter’s latest missile test and renewed his call on Beijing to help bring about denuclearisation on the Korean peninsula.

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Unlike his predecessor, the linkage between trade and politics is rarely far off with the Trump administration. While the US president is no doubt sincere in his belief about the need to right the heavy imbalance in trade between the two countries, he has shown willingness to link it with other contentious issues such as North Korea. China, for now, is happy to rebut hostile US trade acts with words. But Beijing’s patience is not infinite and it does not see wisdom in linking North Korea with bilateral trade. Trump may think he is cutting deals as he has always done as a businessman, but he is risking a trade war between the world’s two largest economies. Clearly, working together will yield far greater benefit for both countries over trade and North Korea, if only he could see it.