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International relations

US-China relations: Waiting for the other shoe to drop

North Korea impasse ends brief Trump-Xi detente

It was good while it lasted, although it did not last very long. This is perhaps the fairest thing one can say about the short-lived harmony in relations between the United States and China since the beginning of the presidency of Donald Trump.

After immediately raising the specter of a frontal clash with Beijing over Taiwan, trade and the South China Sea upon entering the White House, Trump made a 180-degree turn after an April summit with Chinese President Xi Jinping in Florida. Apparently convinced that he could outsource his North Korean problem to China, Trump not only softened his anti-China rhetoric, but also reversed some of his key positions. For instance, he did not label China a "currency manipulator" in mid-April despite an earlier pledge to do so. The Pentagon also suspended "freedom of navigation operations" (FONOPs) in the South China Sea, out of concern that such actions could upset Beijing.

To seasoned watchers of U.S.-China relations, Trump's strategy of relying almost exclusively on Xi to constrain Kim Jong Un, the North Korean dictator hell-bent on acquiring nuclear-tipped intercontinental missiles, was pure wishful thinking. Chinese interests differ fundamentally from those of the United States. Beijing wants to maintain North Korea as a strategic buffer against the U.S. at any cost because it regards the U.S. as a far greater threat to Chinese security than North Korea's nuclear and missile programs. To be sure, China would take some measures to moderate North Korea's behavior, but it will simply not contemplate drastic actions, such as cutting off oil supplies and trade, that might endanger the very existence of the Kim dynasty.

If Pyongyang were to be forced to curtail or suspend its nuclear and missile programs, China would have to threaten the most severe forms of sanctions. Three months after the Xi-Trump summit, it is clear that Beijing is unwilling to go down that path.

Tensions resume

Now that Trump's North Korea strategy has failed, the hiatus of tensions between Washington and Beijing is over. However naive Trump might be about China's willingness to rein in North Korea, a virtual client state, he did make one thing clear to Beijing: U.S.-China ties will depend on how Beijing helps Washington in dealing with Pyongyang. As Trump came to understand that China will not exert its full weight upon North Korea, he began to revert to his original hardline policy toward China.

The initial steps taken to show his displeasure were confined to the security area. At the end of June the U.S. approved $1.4 billion in arms sales to Taiwan. The Pentagon has not only resumed FONOPs in the South China Sea, but also apparently escalated them. For instance, on July 2, a U.S. destroyer sailed within 12 miles of Triton Island, part of the Paracel archipelago that China occupied in 1974 after defeating the South Vietnamese navy. Even more disturbing to Beijing was Washington's decision to dispatch B-1 supersonic bombers to participate in a joint exercise with the Japanese air force over the East China Sea and conduct FONOPs over the South China Sea. This unprecedented move must have greatly upset Chinese leaders, since it signals the Trump administration's hardened resolve to challenge Chinese claims in these disputed areas.

As U.S.-China relations are growing tense again, one has to wonder whether things can deteriorate further.

To be sure, the risks of further escalation between the U.S. and China are real and significant. Eager to repair his tarnished image as a consummate dealmaker, Trump must be tempted to make Xi pay a price for his failure to work with the U.S. on North Korea. His nationalist advisers, led by Steve Bannon, appear to be gaining influence over Trump. Even those who are experienced national security hands, such as Defense Secretary James Mattis and National Security Adviser H.R. McMaster, hold skeptical views toward China and worry about its growing military capabilities and assertiveness in East Asia. With such a lineup in the White House, it is not too difficult for them to agree on toughening the official stance toward China.

Internal divisions

However, that is where consensus ends. In all likelihood, in the coming months, the first real battle over America's China policy will be fought in Washington -- between nationalists led by Bannon and U.S. Trade Representative Robert Lighthizer on one side, and hardnosed pragmatists such as McMaster and Gary Cohn, director of the National Economic Council, on the other. Unless Trump himself totally embraces the position of one camp over the other, his China policy will most likely be a compromise between the two factions. Washington will take a more hardline stance on China, but opt for actions that are deliberate and measured.

Another reason Trump is unlikely to adopt a totally confrontational policy toward Beijing is the prospect of Chinese retaliation. Of course, as a weaker power, China would lose more than the U.S. in an unrestrained clash, but it could still inflict real damage. Since the advent of the Trump administration early this year, Xi has taken care not to do anything that might provoke the mercurial occupant of the White House. Yet should Trump take off his gloves, Xi will undoubtedly do the same. Besides aiding and abetting North Korea, China can also boost its support for Iran, an American nemesis.

Further complicating a confrontational China policy is Trump's self-imposed international isolation because of his "America First" policy. Arguably the world's least popular democratically elected leader, he will find few willing allies should he choose to pick on China. At the same time, it would be easy to imagine more countries sympathizing with China than the U.S. -- not because they necessarily support Chinese positions, but because they are more appalled by Trump's "America first" policy.

If this is to be the case, then we might be spared the nightmarish scenario of a rapid downward spiral of relations between the U.S. and China, even as we say goodbye to the three-month long Trump-Xi honeymoon.

Future trouble

Nevertheless, in the age of Trump, events have often proved rational considerations wrong or overly optimistic. Should the "adults" on both sides be fully in charge, U.S.-China relations will enter a period of rising, but controllable, tensions. Given the serious conflicts of national interest between the two countries, such structural tensions are to be expected. But it would be too sanguine to rule out a vicious tit-for-tat cycle that could eventually bring U.S.-China relations to the brink of total collapse, in spite of the best efforts of these "adults."

The most immediate concern is the secondary sanctions the U.S. will adopt to penalize Chinese entities that do business with North Korea. Beijing may swallow sanctions that single out minor players. But Washington might impose sanctions on major Chinese entities such as national oil companies that export oil to North Korea, or large state-owned banks that funnel funds into that country. Such sanctions could trigger Chinese retaliation, which would in turn lead to tougher measures from the U.S.

On the issue of Taiwan, Beijing is watching anxiously to see whether the Trump White House will block a proposed Senate amendment that, if passed, will allow American naval vessels to dock in ports in Taiwan. Such a step would constitute, in the eyes of Chinese leaders, an intolerable violation of Washington's "One China policy" and would certainly be met with a firm response.

Then there is the pending outcome of trade negotiations between Beijing and Washington. During Trump's summit with Xi in early April, they agreed on a 100-day plan to resolve some key bilateral trade disputes.The mid-July deadline is rapidly approaching, and nobody knows where the negotiations stand.

For those concerned with the trajectory of Sino-U.S. relations, the most sensible thing to do at the moment is to take a deep breath and wait for the other shoe to drop. Compared with the ephemeral harmony following the Xi-Trump summit in April, U.S.-China relations are evidently deteriorating. But it may be too early to bet on a full collapse, since there are powerful forces restraining both sides from taking reckless steps -- so long as both leaders know how to pull punches in an escalating slugging match.

Minxin Pei is a professor of government at Claremont McKenna College and non-resident senior fellow of the German Marshall Fund of the United States.

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