Did President Donald Trump's strategy against China fail? Was it all for naught? Will Joe Biden have a better policy that can bring about better results?
Wednesday morning, President-elect Biden, in a New York Times interview with Tom Friedman, gave you some hints about what he intends to do with the colossus.
He's not going to make any immediate moves and will not remove the 25% tariffs that Trump imposed on about half of the Chinese imports. He said his goal would be "to produce progress on China's abusive practices" -- stealing intellectual property, dumping products, illegal subsidies to corporations and forcing "tech transfers" from American companies to their Chinese counterparts.
"The best China strategy, I think," he told Friedman, "is one which gets every one of our -- or at least what used to be our -- allies on the same page."
When I read that I almost did a spit-take. The irony of the situation must be completely lost on the new president. His little joke about "what used to be our allies" implies that Trump angered them all, making cooperation impossible.
The truth is somewhat different. The United States had a go-it-alone policy because many of our allies have been bought off by China. The Asian colossus has pumped money into so many of our so-called allies' coffers that they were never going to help us tame China. The idea that we can wrangle them into a united front ignores the brilliance of the Chinese Belt and Road initiative that gives aid to 38 countries in Sub-Saharan Africa, 25 countries in East Asia and the Pacific, 17 in the Middle East and North Africa, 18 countries in Latin America and the Caribbean, six countries in Southeast Asia and, most importantly, 34 countries in Europe and Central Asia including, 18 countries in the European Union.
Biden said the U. S. doesn't have "leverage" with China. I would say that before the pandemic, we were on the verge of getting it. Our country was actually making in-roads by driving business out of China to other countries, forcing them to come to the table and make deals that actually were substantive. It looked like we were finally going to get unfettered access to those markets without bogus joint ventures being forced on us. The punishment meted out to companies that routinely dumped products here changed the flow, and while it didn't have the effect of creating as many jobs as Trump would have liked, I believe it could have led to a lot more investment by the Chinese here if it weren't for Covid-19, which, if you remember, broke out here right after the last trade deal was signed.
Do I think the lash was the only thing that worked with China? I think that a more thoughtful, coherent, and respectful method would have resulted in less of a hard-line intransigence against the U.S. You can kill more flies with honey than with angry tweets. But the fact is, for the first time, China was beginning to change its behavior, because it feared the loss of jobs to other countries and recognized that U.S. companies would fall out of favor with our president if they courted Chinese customers. Only Nike (NKE) , Apple (AAPL) and Starbucks (SBUX) expanded in China during that period, as all had extensive ties to the government or hired thousands of people who otherwise might not have jobs.
Did China stop its more insidious practices? I think it certainly feared punishment if there was theft. It stopped dumping here. It was about to give our financial companies licenses without demanding joke, parasitic partners.
The heavy-handed, capricious, publicly disrespectful comments of the president did not help the cause, though. They forced China President Xi's hand and made him much more of an enemy than necessary. But I think that the policies, if done more quietly, would have continued to work as they were.
I can tell you one way that won't work, though: Trying to get the so-called allies to help. That's a coalition of the bought-off unwilling who need the Chinese market and their money way too much to try to change China's behavior. They, plus our own elites and many of our multinationals, are the culprits. Our own companies, save Apple, are perfectly willing to sacrifice our own workers on the altar of Chinese profits.
In short, the Biden who was interviewed is out of touch. The U.S. was forced to go it alone. We are -or were, before the pandemic-the only one that could afford to do so.
I hope Biden understands what was good and bad about the Trump policies, because most were good and the only real bad part? Trump's insistence on surprise and anger and disrespect for a country with leaders that respect might and toughness as long as it's done privately and not, alas, on the Twitter feed of the Real Donald J. Trump.