Commentary on Political Economy

Sunday 16 August 2020


Fraying U.S.-China Relations Tested by Trump Ahead of Election

Bloomberg News
Updated on 
  • Tensions rise as president highlights tough-on-China stances
  • Topics range from TikTok to Taiwan jet sales to Hong Kong
U.S.-China Trade Talks Postponed
U.S.-China Trade Talks Postponed

The almost daily drumbeat of tensions between the U.S. and China shows little sign of letting up, while touching on everything from the coronavirus to trade to defense issues to monetary policy.

President Donald Trump has made his tough positions on China a key element in the lead-up to the U.S. presidential election, now less than three months away, and he seems intent on keeping the pressure on.

Tensions have been mounting since the Covid-19 pandemic spread across the globe early this year. Barely a day goes by without Trump slamming what he calls a “plague” unleashed on the world by China in press briefings, Twitter and elsewhere.

President Trump Holds News Conference In Brady Press Briefing Room
Donald Trump speaks on Aug. 14. Photographer: Kevin Dietsch/UPI/Bloomberg

“We were unfairly treated by China because they could have stopped it,” Trump told reporters on Saturday about the coronavirus.

Some China hawks in the Trump administration, from Secretary of State Michael Pompeo to White House trade adviser Peter Navarro, see a historic opening to re-balance decades of U.S.-China relations. Senior officials from Washington and Beijing late last week postponed trade talks that had been set for this past weekend to discuss the status of the “phase one” trade deal signed early in the year.

Against that background, it’s unclear how heated things may get between now and November, while the provocations mount:

  • The president earlier this month moved to ban WeChat, a popular social networking and mobile payment app developed by Chinese Internet giant Tencent Holdings Ltd.
  • Trump on Saturday boasted about the actions he’s taken against Huawei Technologies, including jawboning other countries into avoiding the Chinese firm’s products, and didn’t rule out actions against other companies. While he didn’t elaborate, those comments are sure to keep markets on edge.
  • The President’s Working Group on Financial Markets this month said U.S. stock exchanges should set new rules that could trigger the delisting of Chinese companies.

Although bilateral trade talks seem to be on hold for now, Trump said China is buying large amounts of U.S. corn, soybeans and cattle. “China has been buying a lot of -- a lot of things, and they’re doing that to keep me happy,” he said Saturday.

Even so, he said, China’s government would prefer that he lose in November to Democrat Joe Biden. On Sunday he retweeted a Twitter post from a Republican aide noting that Biden and running mate Kamala Harris “didn’t mention China a single time” in their joint announcement last week.

Flash Points

Beyond the Covid-19 pandemic and Beijing’s tightening grip over Hong Kong, the relationship has a series of flash points including 5G technology and defense as Trump, formerly a fan of Chinese President Xi Jinping, sours on the relationship.

“I had a great relationship with President Xi,” Trump said in an interview last week with Fox Sports Radio. “I like him, but I don’t feel the same way now.”

Trump on Friday had ordered ByteDance Ltd., the Chinese owner of the popular music video app TikTok, to sell its U.S. assets on national security grounds. Asked whether there are other companies he’s looking at banning or restricting in the U.S., Trump said: “We’re looking at other things, yes.” He didn’t elaborate.

The Trump administration in July rejected China’s expansive maritime claims in the South China Sea, reversing a previous policy of not taking sides in such disputes. The U.S. Navy sent an aircraft carrier there on Friday to conduct maritime air defense operations.

Taiwan on Friday formally signed an agreement to buy 66 of the latest model F-16 jets built by Lockheed Martin Corp. The purchase marks the first sale of advanced fighter jets to the island since President George H.W. Bush announced approval for 150 F-16s in 1992.

The U.S. is gathering its Asian allies to discuss deploying medium-range missiles in the region as an effort to counter China’s nuclear buildup, the Nikkei Asian Review reported on Sunday, citing Marshall Billingslea, U.S. special presidential envoy for arms control.

Military Tests

On Sunday, the Chinese army released footage of its Hong Kong garrison firing cannons and torpedoes in a drill in the South China Sea. The People’s Liberation Army recently tested the weaponry, including a torpedo launch from the vessel Huizhou that successfully hit its target, according to state media.

China has its own complaints with U.S. policy. On Sunday, the chairman of China’s banking watchdog said that the Federal Reserve’s unparalleled stimulus to shore up the economy from the coronavirus risks plunging the world into a financial crisis, given the dominance of the U.S. dollar in the international monetary system.

“The unprecedented, unlimited quantitative easing policy of the U.S. actually consumes the creditworthiness of the dollar and erodes the foundation of global financial stability,” the China Banking Regulatory Commission’s Guo Shuqing wrote in the Communist Party’s Qiushi magazine Sunday.

No comments:

Post a Comment