You Can Be a Trade Negotiator, Too!
With a call possible soon between presidents Trump and Xi, what would you consider a deal that would set the U.S.-China relationship on a better course.
I have spilled much virtual ink on the world’s rising trade tensions, the wastefulness of tariffs, and the likelihood that the relationship between Washington and Beijing will get worse before it gets better. Not long ago, I also outlined why a deal is so difficult given that neither side seems in the mood to compromise.
But with a call between Donald Trump and Xi Jinping imminent - or not - it’s a useful thought experiment to imagine the “gives” and “gets” that would lead to a new trade framework and better relations. What seems fair to you? What do you think you could get broad enough support in Congress? What initial agreement can move this complicated rivalry back onto a smoother track?
Close your eyes and pretend you are Treasury Secretary Scott Bessent or U.S. Trade Representative Jamieson Greer. (At least one of the jobs will likely be open within a year.)
What would you want from China?
Better cooperation on fentanyl enforcement. This is important, but probably not worth much without specific Chinese commitments and a massive U.S. effort to reduce demand.
Better intellectual property protection. Again, hard to define what constitutes ‘better,’ but sure. Why not?
Loosen restrictions on rare earth exports. Bessent insists this was agreed in his Geneva meetings last month, but that China has yet to follow through.
Buy more U.S. goods, especially soybeans, beef and airplanes. This should be easy for China to agree to.
End subsidies and preferences that drive China’s massive manufactured export surplus. This is harder to agree on, but the Chinese economy is too dependent on exports when domestic demand is weak, and it hurts rich and poor countries alike.
Restore civil rights protections in Hong Kong. This doesn’t seem to be high on Trump’s list, but it’s a big deal in Congress. There’s little chance Xi would offer this explicitly, but he might reiterate commitments to the city’s special status.
Ease the repression of Uyghurs in Xinjiang. Again, highly unlikely, but some quiet understanding to allow human rights assessments might be possible.
End territorial claims in the South China Sea. Or maybe some of them?
Pledge to renounce military action as Taiwan chooses its own future. This is probably crazy talk, but how many advanced AI chips would you allow China for a credible commitment to avoid war?
Abandon Chinese Communist Party rule. Okay, getting carried away here ….
What are you prepared to offer?
Reduce fentanyl tariffs. See above on the need to restrict demand.
Reduce reciprocal tariffs. It should be easy, except for the fact that Trump seems to have read different textbooks from the rest of us on why tariffs are bad.
Freeze threats to expel Chinese students. I surely don’t believe that exchange programs solve all geopolitical tensions, but it can’t be a bad thing to have more Chinese who understand America. What we really need is more Americans getting grants and incentives to study in China.
Relax export restrictions on high-tech chips. Sure. Some, but probably not all.
Relax restrictions on Chinese investments in the U.S. Again, we don’t want Chinese owners of Northrop Grumman, but would it be so bad if they owned Rockefeller Center? It’s not like they can take it home.
Treat China with respect. This is a persistent ask by a country that is emerging as a global force after centuries of terrible treatment by colonial powers. It wouldn’t kill us to tone down the campaign rhetoric - at least in off-years.
Stop criticizing China’s political changes in Hong Kong. Easy for Trump, who just told a Saudi audience that America was done lecturing other countries. Congress might freak out, but the president wants this issue on the back burner.
Reduce U.S. naval presence in the Pacific. Trump has been pulling back our commitments to Europe, so it seems likely he might consider making some quiet commitments to Xi to meddle less in the region.
Stop arming Taiwan. More crazy talk, but maybe not so crazy. The more the president talks about ending ‘forever wars,’ the less America’s commitment to Taiwan looks credible.
Adopt a single-party system. Okay, that’s for a different column on MAGA America. Moreover, it’s not at all clear this would ease the tensions with the Chinese Communist Party.
These aren’t comprehensive lists, but they cover most of the issues that separate the world’s two great powers. So give it some thought.
I would easily trade 1-3 on the “give” list for 1-3 on the “get” list. I might even concede 1-5, if we could credibly constrain China’s manufacturing exports. It’s probably worth trying to keep the political and military issues separate from the economic tensions. They are incredibly sensitive and complex, although that’s hard to do as Congress gets involved and the mid-terms approach.
But you try. What’s a good deal in your book?