Trade war with China likely under Donald Trump: commentary
US-CHINA relations, doubtlessly the world's most important bilateral ties, are about to get a stress test.
Among many potential foreign policy challenges facing the administration of president-elect Donald Trump, a rapid deterioration in the relations between Washington and Beijing will have profound ?and decidedly negative ?consequences for global peace and prosperity, says professor of government at the liberal arts college, Claremont McKenna College, in California, Minxin Pei.
The most immediate trigger of a downward spiral of US-China relations, which have been carefully nurtured by both Republican and Democratic administrations over decades, is almost certain to be a trade war with China, says Mr Pei, who's the author of China's Crony Capitalism, the Fortune.com reported.
A centerpiece of Mr Trump's winning campaign strategy is trade protectionism. To gain the support from blue-collar manufacturing workers in the American heartland, Mr Trump has vowed, among other things, to abrogate trade agreements and impose unilateral tariffs. In the case of China, he has floated the idea of slapping tariffs as high as 45 per cent on imports from China.
If the president-elect carries out his campaign pledge, China's exports to the US, worth US$483 billion in 2015, could collapse. Needless to say, American exports to China, estimated at $116 billion as of 2015, will plunge as China retaliates.
The economic consequences of such a trade war will not be restricted only to the US and the Chinese economy. Since 35 per cent of China's exports in 2015 was processing trade" (China imports components from other countries and then assembles them for exports), $169 billion of Chinese exports to the US in 2015 actually represented imports from Japan, South Korea, Taiwan, and others. Obviously, these economies, all critical trading partners of the US, will be collateral damage.
Besides a potential trade war, US-China economic relations could suffer another blow during a Trump administration: more restrictions imposed on Chinese investments in the US Trade protectionism is likely to be extended to restrictions on Chinese acquisition of American technologies and companies because of fear that they could endanger American jobs. The prospect of concluding a US-China bilateral investment treaty (BIT) now looks very dim.
As trade and investment constitute the most important foundation of US-China relations, the dismantling of this foundation will cause spillover effects in other areas, most critically East Asian security.
In light of the near certainty that Trump will scrap President Barack Obama's strategic pivot to Asia" (which includes the Trans-Pacific Partnership, or TPP, as its economic pillar), Chinese leaders will be especially emboldened to challenge American presence in Asia.
Of the potential regional flash points that could bring US and China face to face in a dangerous military confrontation, two stand out ?the South China Sea and Taiwan.
Before Trump's stunning victory, the conventional wisdom was that Hillary Clinton would take a tougher policy toward Beijing than Trump.
Now that Trump is headed for the White House, it is worth noting that his China policy, to the extent there is such a thing, consists of trade protectionism on the one hand and abandonment of long-standing security commitments on the other. If anything, this is a recipe for conflict.
US-CHINA relations, doubtlessly the world's most important bilateral ties, are about to get a stress test.
Among many potential foreign policy challenges facing the administration of president-elect Donald Trump, a rapid deterioration in the relations between Washington and Beijing will have profound ?and decidedly negative ?consequences for global peace and prosperity, says professor of government at the liberal arts college, Claremont McKenna College, in California, Minxin Pei.
The most immediate trigger of a downward spiral of US-China relations, which have been carefully nurtured by both Republican and Democratic administrations over decades, is almost certain to be a trade war with China, says Mr Pei, who's the author of China's Crony Capitalism, the Fortune.com reported.
A centerpiece of Mr Trump's winning campaign strategy is trade protectionism. To gain the support from blue-collar manufacturing workers in the American heartland, Mr Trump has vowed, among other things, to abrogate trade agreements and impose unilateral tariffs. In the case of China, he has floated the idea of slapping tariffs as high as 45 per cent on imports from China.
If the president-elect carries out his campaign pledge, China's exports to the US, worth US$483 billion in 2015, could collapse. Needless to say, American exports to China, estimated at $116 billion as of 2015, will plunge as China retaliates.
The economic consequences of such a trade war will not be restricted only to the US and the Chinese economy. Since 35 per cent of China's exports in 2015 was processing trade" (China imports components from other countries and then assembles them for exports), $169 billion of Chinese exports to the US in 2015 actually represented imports from Japan, South Korea, Taiwan, and others. Obviously, these economies, all critical trading partners of the US, will be collateral damage.
Besides a potential trade war, US-China economic relations could suffer another blow during a Trump administration: more restrictions imposed on Chinese investments in the US Trade protectionism is likely to be extended to restrictions on Chinese acquisition of American technologies and companies because of fear that they could endanger American jobs. The prospect of concluding a US-China bilateral investment treaty (BIT) now looks very dim.
As trade and investment constitute the most important foundation of US-China relations, the dismantling of this foundation will cause spillover effects in other areas, most critically East Asian security.
In light of the near certainty that Trump will scrap President Barack Obama's strategic pivot to Asia" (which includes the Trans-Pacific Partnership, or TPP, as its economic pillar), Chinese leaders will be especially emboldened to challenge American presence in Asia.
Of the potential regional flash points that could bring US and China face to face in a dangerous military confrontation, two stand out ?the South China Sea and Taiwan.
Before Trump's stunning victory, the conventional wisdom was that Hillary Clinton would take a tougher policy toward Beijing than Trump.
Now that Trump is headed for the White House, it is worth noting that his China policy, to the extent there is such a thing, consists of trade protectionism on the one hand and abandonment of long-standing security commitments on the other. If anything, this is a recipe for conflict.