The ruling Communist Party of China routinely engages in political repression, including most recently by breaking its promise to respect the semi-independent system of government in Hong Kong, and brutal conduct against religious minorities. It not only failed to contain the spread of COVID-19, but its pattern of deception and obfuscation wasted valuable time that countries like the U.S. could have used to help fight the disease. These are the actions of an adversary, not a friend.
In the realm of trade policy, the most prevalent response to these actions has been for politicians to posture to see who can be the “toughest.” This includes Joe Biden, who said the United States should “get tough on China,” and President Donald Trump, who said “I was very tough with China.”
In reality, President Trump’s trade policy with respect to China has not been “tough.” It has been costly and counterproductive, strengthening China’s hand in global relations.
January 23, 2017: TPP withdrawal. One of President Trump’s first actions was to withdraw from the Trans-Pacific Partnership (TPP). This trade agreement between the United States and 11 other countries would have made it easier for Americans to do business in the region and strengthened U.S. ties in the Pacific Rim. TPP was described as “a calculated effort to contain China and to shift power in trade in the Asia-Pacific from China to the U.S.” Among other things, it would have presented countries with a market-oriented economic model as an alternative to China’s state-controlled system.
To put it mildly, President Trump didn’t like TPP as negotiated by the Obama administration. One possible remedy would have been to seek to modify TPP to make it stronger and more favorable to the United States. Instead, he simply quit, giving a major, unreciprocated gift to China.
(Note: The Trump administration later cut and pasted major chunks of the TPP agreement into the new U.S.-Mexico-Canada Agreement [USMCA]).
January 11, 2018: Steel and aluminum tariffs imposed on our allies. On this date, President Trump announced the imposition of 25 percent tariffs on imported steel and 10 percent tariffs on imported aluminum based on dubious national security grounds under Section 232 of the Trade Expansion Act of 1962. These tariffs increased the cost of steel and aluminum inputs used by U.S. manufacturers, making it harder for their products to compete with Chinese exports.
A strong trade policy would have focused on finding ways to work with our allies to provide a unified front in response to threats from China. Instead, the Trump administration needlessly alienated U.S. allies and partners while provoking retaliatory tariffs on American exports and driving up costs for American manufacturers.
March 22, 2018: Initial Section 301 tariffs imposed. Tariffs imposed under Section 301 of the Trade Act of 1974 on Americans who import products from China are the centerpiece of President Trump’s allegedly tough trade policy.
Section 301 tariffs are intended to be used as a battering ram to coerce other countries into changing their policies. In theory, the United States imposes Section 301 tariffs and the targeted country then changes its policies, at which point the United States removes the tariffs. (Note: This rarely works.)
Slapping tariffs on Americans is hardly a “tough” trade policy. As President Ronald Reagan observed, “We're in the same boat with our trading partners. If one partner shoots a hole in the boat, does it make sense for the other one to shoot another hole in the boat? Some say, yes, and call that getting tough. Well, I call it stupid.”
The Office of the U.S. Trade Representative says “China flouts the rules” with respect to its World Trade Organization (WTO) obligations, but the Trump administration has filed a grand total of just one case at the WTO challenging China’s practices. So far, the administration’s unilateral Section 301 tariffs have cost American taxpayers an average of $419 per household. That is on top of the costs from China’s imposition of retaliatory tariffs on $91 billion in U.S. exports.
President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!— Donald J. Trump (@realDonaldTrump) April 8, 2018
President Xi’s actions on a variety of fronts affecting the United States do not merit the respect of the U.S. government or of the American people.
June to August, 2019: Trump sides with China over Hong Kong. In 2019, multiple reports emerged of President Trump prioritizing the ongoing negotiation of his trade deal with China over the rights of people in Hong Kong. This misplaced priority is especially concerning now that China is again threatening Hong Kong.
Financial Times: “Donald Trump told Chinese president Xi Jinping last month that the US would tone down criticism of Beijing’s approach to Hong Kong following massive protests in the territory in order to revive trade talks with China.”
CNN: “During a private phone call in June, President Donald Trump promised Chinese President Xi Jinping that the US would remain quiet on pro-democracy protests in Hong Kong while trade talks continued, two sources familiar with the call tell CNN.”
Politico: “As the protests have intensified over the past month, the president has remained determined to keep China’s human rights abuses from complicating his trade negotiations, going so far as to make a unilateral concession to Xi in the run-up to the G-20 Summit in June, according to three people briefed on the conversation.”
Wall Street Journal: “The Trump administration offered guidance to officials to maintain a measured response to antigovernment protests in Hong Kong over fears that any public statements favoring demonstrators would derail U.S. efforts to get a trade deal with China.”
To preserve his trade deal -- which he is now threatening to tear up -- President Trump even forced Vice President Pence to delay a major speech scheduled for the anniversary of the Tiananmen Square massacre.
January 15, 2020: Phase One trade deal empowers China’s state-owned enterprises. Under U.S. law, the government’s official negotiating objective is to “eliminate or prevent trade distortions and unfair competition favoring state-owned and state-controlled enterprises.” The phase one deal between the United States and China does the opposite of this.
As trade experts Chad Bown and Mary Lovely pointed out, “The phase one accord committing China to buy additional US goods seems certain to strengthen Chinese state-owned enterprises (SOEs) and state control of the economy—the very policies the administration’s trade war supposedly sought to combat.” Realistically, the agreement’s purchase targets can only be met by China directing state-owned enterprises like Cofco and Sinograin to buy more U.S. goods and services. (Note: In response to recent tensions, China directed its SOEs to suspend purchases of some U.S. farm products.)
The administration’s much-hyped phase one trade deal with China failed to secure any reductions in Chinese retaliatory tariffs on U.S. exports. The Trump administration apparently thought the deal was so weak that it didn’t merit any reduction in U.S. tariffs, either.
Many adjectives can be used to describe the Trump administration’s trade policies—costly, ineffective, counter-productive, or misguided—but no one should call them “tough.”