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By PHELIM KINE
with STUART LAU
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Hi, China Watchers. Today we examine the China policy plans of a possible second Trump administration, look at the enforcement challenges for the Uyghur Forced Labor Prevention Act and profile a book that warns that the U.S. and China are barreling toward a "potentially devastating conflict" over Taiwan.
Let's get to it. — Phelim.
All the ways Trump would change Biden's China policy
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homas Peter-Pool/Getty Images |
It's been two years since the Biden administration introduced its "invest, align and compete" China policy. As the November election approaches, it's worth revisiting exactly how much that would change if Donald Trump retakes the presidency.
More than a year ago, Trump outlined elements of his China policy in his "Agenda 47" online policy platform. It's thin on detail — and the Trump campaign declined to respond to questions — but combative. A second Trump administration will focus on everything from "hunting down Chinese spies" to banning Chinese ownership of "vital infrastructure." The basic thrust: Biden's China policy has failed and Trump will "completely eliminate U.S. dependence on China."
The bluster factor. That may be just campaign bombast. Under a Trump presidency "many [China policy] elements will be consistent — the pivot to strategic competition occurred under Trump and Biden has carried forward many aspects of that approach," said Rick Waters, former assistant secretary of State for China and Taiwan. At least one analyst in China agrees. Trump will "behave more like Joe Biden because Trump's legacy during his first term is the bipartisan consensus against China," said Ret Snr. Col Zhou Bo, a senior fellow at Tsinghua University's Center for International Security in Beijing.
But overall, Beijing is leery of Trump's ideas: "We firmly oppose any attempt to manipulate China-related issues … and damage China's interests during the election," Chinese embassy spokesperson Liu Pengyu said Wednesday.
Homeland factory focus. The "invest" prong of Biden's China strategy involves government investment in key U.S. industries. The policy flagship is the CHIPS and Science Act, which allocates billions of dollars for semiconductor development and manufacturing. Trump proposes a "Strategic National Manufacturing Initiative" that he says will "rebalance the global trading system and dramatically strengthen America."
Tariffs galore. Trump doesn't spill on how that will work, but says he'll fund it through "universal baseline tariffs" that include 10 percent tariffs on all foreign imports and 60 percent duties on Chinese goods. That could boost market share for domestic producers by pricing-out imported products, but "dull incentives for U.S. firms to make needed capital investments in innovation" to compete with foreign firms in the long-term, said Harry Broadman, former U.S. Assistant Trade Representative and currently a principal at WestExec Advisors.
Adios, alignment. The Biden administration has pursued the "align" component of its China strategy by bolstering ties with allies and partners through groupings such as the AUKUS security partnership with the U.K. and Australia. The future of those alliances under Trump is unclear. "Trump comes in a little bit more skeptical on the burden-sharing that’s being done by allies and partners," said Zack Cooper, former assistant to the deputy national security adviser for combating terrorism at the National Security Council in the George W. Bush administration. And Trump's climate policy — he said in his "America Must Have the #1 Lowest Cost Energy and Electricity on Earth" policy page that he'll exit the "horrendously unfair" Paris Climate Agreement, again — is likely to sour ties with the strategically vital Pacific island countries and others struggling with the impacts of climate change.
"Compete" on steroids. Along with tariffs, Trump plans a triple-punch approach to China's predatory trade practices that starts with revoking China's Permanent Normal Trade Relations status, a phase-out of "all Chinese imports of essential goods" and blocking transshipment of Chinese imports through third countries. The U.S.-China Business Council has warned that combination risks "retaliatory measures from China, causing additional U.S. jobs and output losses."
Trump is more optimistic. "We'll get along very well with China, … they'll respect us again," after he rolls out his policies, Trump said in the policy document.
TRANSLATING WASHINGTON
— BEIJING SANCTIONS ARMS FIRMS, MIKE GALLAGHER: The Chinese government imposed sanctions on Wednesday against senior executives of 12 U.S. weapons manufacturers including Lockheed Martin Aeronautics, Raytheon Missile Systems and General Dynamics Ordnance.
Beijing called the move a reprisal for U.S. sanctions on Chinese firms linked to exports enabling Moscow's war on Ukraine. Those were "illegal unilateral sanctions on a number of Chinese entities on the basis of the so-called Russia-related factors," China's Foreign Ministry said in a statement.The sanctions are also a response to the U.S. continuing to "sell arms to China's Taiwan region," the statement said.
The sanctions freeze the firms' assets in China and impose a visa ban on their senior executives. Lockheed Martin "closely adheres to U.S. government policy with regard to conducting business with foreign governments," the company said in a statement. Raytheon and General Dynamics didn't respond to requests for comment.
Former House Select Committee on China chair Mike Gallagher (R-Wis.) also ended up on a Chinese sanctions list. Gallagher earned that through "words and deeds that interfere in China's internal affairs, jeopardize China's sovereignty and territorial integrity, and infringe upon the interests of the Chinese side," China's Foreign Ministry said Tuesday. Ministry spokesperson Wang Wenbin piled on, accusing Gallagher of being "driven by selfish interest and bias" on Wednesday.
Gallagher clapped back. The sanctions confirm Beijing as "a perpetually paranoid, Marxist-Leninist regime," he said in a statement Tuesday.
TRANSLATING EUROPE
UK SPY CASE SUSPECT FOUND DEAD: A man charged in the U.K. with assisting Hong Kong's intelligence service has died, police confirmed Tuesday. Matthew Trickett, 37, was found dead Sunday in Grenfell Park in Maidenhead following a report from a member of the public. POLITICO's Noah Keate has the story.
EU READYING FOR TARIFFS ON CHINESE ELECTRIC CARS: The massively growing market share of Chinese electric vehicles in Europe looks set to be a main target as European politicians gear up for the Continent-wide election in early June. Brussels is now preparing to announce tariffs on these cars in the next two weeks, POLITICO Brussels Playbook reported Wednesday.
While the official deadline for Europe's anti-subsidy investigation is early July, the European Commission has to inform affected parties four weeks in advance, which would be around June 5 — on the eve of the EU elections slated for June 6-9.
— Eye for an eye: Referring to the EU probe, Commission President Ursula von der Leyen said in an election debate on Tuesday: "Should we confirm — what I expect — that such subsidies exist, then I can guarantee the level of the duties we would impose is correspondent to the level of damage," she said, as Eddy Wax writes in to report.
— China threatens Porsches and SUVs: In an escalation of the trade war, Beijing is threatening to ramp up its tariffs on cars with big combustion engines, with German auto giants expected to be hit the hardest.
In a statement, the China Chamber of Commerce to the EU said Tuesday it had been "informed by insiders that China may consider increasing temporary tariff rates … China could raise its temporary tariff rate on imported large-engine vehicles to a maximum of 25 percent." POLITICO's Hans von der Burchard and Julia Wacket have more on how Germany lost the fight to stop the EU from imposing tariffs.
EU LAWMAKERS CALL FOR GENOMICS CHECKS: A group of lawmakers from the European Parliament's foreign affairs committee are calling on the EU to impose checks on China's genomic companies, saying the data collected on European soil could pose a threat to national security. Pointing at state-linked entity BGI Group, the lawmakers told China Watcher that the EU should "tighten research security by barring funding for sensitive research projects linked to one of the 103 foreign entities that pose a risk to its national security." BGI previously said it had no access to personal or genetic data.
The five lawmakers — Germany's Reinhard Bütikofer, Slovakia's Miriam Lexmann, Dutchman Bart Groothuis, Lithuanian Juozas Olekas, and Poland's Anna Fotyga — added: "Just as the EU seeks alternatives to Russian energy to ensure security and autonomy, a similar recalibration is needed in the realm of genomics."
HOT FROM THE CHINA WATCHERSPHERE
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— UK: CHINA'S SHIPPING RUSSIA 'LETHAL AID": The U.K. government warned Wednesday that Beijing is providing lethal weaponry to Russia to support its war on Ukraine. "Lethal aid is now, or will be, flowing from China to Russia and into Ukraine," British Defense Secretary Grant Shapps said at a conference on Wednesday, per Reuters. U.S. National security advisor Jake Sullivan found Shapps' comments baffling: "I look forward to speaking with the U.K. to make sure that we have a common operating picture we have had when we’ve been on the same page — I just want to understand better what exactly that comment was referring to," Sullivan told reporters Wednesday. Chinese Foreign Minister Wang Yi told Ukraine's Foreign Minister Dmytro Kuleba in February that Beijing won't "sell lethal weapons to regions and parties involved in conflicts." Liu at the Chinese embassy in Washington repeated that position on Wednesday, adding that China "will certainly not accept being the scapegoat" for the Ukraine conflict.
— CHINA DIPLOMACY A THORNTON FAMILY AFFAIR: Former Goldman Sachs president and chair emeritus of the Brookings Institution John Thornton has spent years rubbing elbows with China's senior leadership and urging closer U.S.-China ties. His son John Randolph Thornton is following in his footsteps as an advocate for "people to people connectivity" in an interview with Chinese state television network CGTN released on Tuesday. "The more that you have exposure between the two [countries], it can only be positive," Thornton Jr. told the interviewer. CGTN identifies the younger Thornton as a "young American author delving into cross-cultural experiences in China" rather than the son of a business mogul that Xi Jinping's chief of staff, Cai Qi, last month asked to boost bilateral "exchanges and friendship."
— VATICAN INCHES CLOSER TO CHINA: The Vatican, one of Taiwan's 12 remaining diplomatic allies, wants to deepen its ties with Beijing. The Holy See wants to set up a permanent office in China as part of long-term efforts "to have a stable presence" in the country, said Cardinal Secretary of State Pietro Parolin Tuesday, per Reuters. Beijing is delighted. "China is ready to work with the Vatican for the steady improvement of relations," Chinese Foreign Ministry spokesperson Wang Wenbin said Wednesday. Taiwan's playing it cool. The self-governing island " will continue to enhance cooperation with the Holy See…and deepen the long-term relations between Taiwan and the Vatican based on our common values," Taiwan's diplomatic outpost in Washington said in a statement Wednesday.
THREE MINUTES WITH …
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Guang Niu/Getty Images |
The Department of Homeland Security has announced the addition of another 26 Chinese textile firms to a blacklist of firms implicated in exporting cotton from Xinjiang in violation of the Uyghur Forced Labor Prevention Act. China Watcher spoke to DHS Under Secretary for Policy Robert Silvers, who chairs the interagency Forced Labor Enforcement Task Force, about the challenges of keeping slavery-linked products out of the U.S. supply chain.
Responses have been edited for length and clarity.
What more do you need to stop Xinjiang cotton imports?
Funding so that we can hire more personnel. We are investing a lot already in very promising technologies that help us in this work — supply chain mapping software tools that use AI technology, to do pattern recognition and detect anomalies in shipments that can help us target where we investigate the huge volumes of cargo that are coming into the United States. We're using isotope and DNA testing to detect whether cotton or other commodities may have been grown in Xinjiang … but obviously software licenses cost money, DNA testing costs money, personnel costs money, so we're doing a lot with what we have.
What tactics are Chinese exporters using to try to slip Xinjiang cotton into the U.S.?
Companies will send the products to a third country or a third location before they are shipped onward to the U.S. We see companies that have been the subject of our enforcement sometimes try to operate through shell companies or change corporate identities. We see mislabeling or misrepresenting the provenance of goods.
How has Central America become a transshipment hot spot?
There's a large textile industrial base in some of those countries. Guatemala is one of them, and El Salvador. We want investments in those countries to succeed but we don't want them to be overtaken by bad actors that are trying to cheat the system. We have increased our on-the-ground enforcement and auditing in textile facilities in that region.
**How will the election results shuffle the deck for the EU’s top jobs? Tune in on Monday, June 10 to hear what POLITICO Live’s expert speakers make of the fresh election results. Sign up to watch live!**
HEADLINES
Washington Post: American students have soured on China. That's bad for the U.S.
Financial Times: The battlegrounds that could decide a US-China war over Taiwan
The Spectator: The Harvard man who became Xi Jinping's favourite academic
HEADS UP
— CALIFORNIA HOSTS BILATERAL CLIMATE TALKS: U.S. and Chinese officials will convene in Berkeley, California, on Wednesday and Thursday for a "High-Level Event on Subnational Climate Action." The meeting follows talks between John Podesta, senior adviser to the president for international climate policy, and his Chinese counterpart, Liu Zhenmin, in Washington earlier this month (dished in China Watcher here). Brace for more Chinese rhetoric on how the Biden administration's concerns about China's industrial overcapacity threatens bilateral climate cooperation. POLITICO's Blanca Begert will have more details in the California Climate newsletter — subscribe!
ONE BOOK, THREE QUESTIONS
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The Book: World on the Brink: How America Can Beat China in the Race for the Twenty-First Century
The Author: Dmitri Alperovitch is chair of the Washington-based think tank Silverado Policy Accelerator and co-founder of the cybersecurity firm CrowdStrike.
Responses have been edited for length and clarity.
What is the most important takeaway from your book?
We are on a path to a potentially devastating conflict with China over Taiwan that we have to deter at all costs.
What was the most surprising thing you learned while writing this book?
Just how much the current Cold War II with China resembles the original Cold War I with the Soviet Union. On nearly every level of the competition, we face very similar problems to the ones we had in the past — a conventional and nuclear arms race, a global competition for supremacy, an ideological struggle, economic warfare, an espionage war, a scramble for military bases in allied countries and a major regional flash point that can bring the two large powers into a hot war.
How can the U.S. and China avoid military conflict?
Ensuring that China can never succeed in invading Taiwan — and that it never tries. If the conflict over Taiwan no longer seems possible and ceases to overshadow every aspect of the relationship between the countries, it is possible to achieve improvement and stability in the relationship.
Cold War II will remain, just as Cold War I did not end with detente, but the global economy will benefit from the increased cooperation and stability and the world will be safer as a result.
Got a book to recommend? Tell me about it at pkine@politico.com.Thanks to: Heidi Vogt, Hans von der Burchard, JuliaWacket, Eddy Wax, Noah Keate and digital producers Tara Gnewikow and Natália Delgado. Do you have tips? Chinese-language stories we might have missed? Would you like to contribute to China Watcher or comment on this week’s items? Email us at pkine@politico.com and slau@politico.com.
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