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Hi, China Watchers. Today we look at where China sits on the agenda of President Donald Trump's summit tomorrow with Japan's prime minister, assess Beijing's tariff reprisals and look at how Oklahoma is battening down the hatches against possible Chinese aggression.
Let's get to it. — Phelim.
ISHIBA SEEKS TRUMP 'BUDDY LIST' STATUS
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Japanese Prime Minister Shigeru Ishiba is the second leader to garner a Washington summit with President Donald Trump since he took office last month. And when Ishiba and Trump sit down on Friday, much of the talk will be about how to curb Beijing's potential threat to regional security.
Strategic reassurance. The Japanese leader will likely seek assurances that Trump remains aligned with a strategic relationship aimed to offset China's growing military assertiveness in the region. The Japanese "want an understanding of what the United States is planning vis-a-vis the Indo-Pacific — what’s the strategy?" said Rahm Emanuel, former U.S. ambassador to Japan in the Biden administration.
Tokyo's concerns about China have risen in the wake of joint Chinese-Russian naval patrols off Japan's coast in September and China's increasingly aggressive incursions around the disputed Senkaku islands (which Beijing calls the Diaoyu islands). That means Ishiba will likely seek alignment with Trump "on national security, defense and ways to bring that closer together," said Sen. Bill Hagerty (R-Tenn.), former U.S. ambassador to Japan in the first Trump administration.
The Taiwan question. Tokyo is also spooked by Trump's criticism of Taiwan's trade relationship with the U.S. and his suggestion that any effort to defend the island from a possible Chinese invasion would be futile. Japan sees Taiwan's security as essential to the protection of Japan's adjacent southwest islands. Those concerns prompted Japanese Defense Minister Nakatani Gen to reaffirm the U.S.-Japan commitment to "expand bilateral presence" in those waters during a call with U.S. Defense Secretary Pete Hegseth last month.
Ishiba will want to know that Trump won't sacrifice Taiwan as part of a "grand bargain with China in exchange for some kind of assurance on economic security," said Yuki Tatsumi, former special assistant for political affairs at the Japanese embassy in Washington, now at the Stimson Center.
How will Ishiba go about it? Ishiba likely wants to replicate the success of his predecessor Shinzo Abe in striking a personal connection with Trump in maintaining smooth U.S.-Japan ties. Abe was the first foreign leader to fly to the U.S. to congratulate Trump on his electoral victory in 2016, forging a bond between the two leaders that sustained across Trump's presidency.
"Abe got on to Trump’s buddy list very early and that shielded Japan from a lot of the turbulence" that hit other U.S. allies in his first term, Tatsumi said. Getting on Trump's good side could also allay Ishiba's fears about "whether Japan will get slapped with large tariffs or not," said Ken Weinstein, U.S. ambassador-designate in the first Trump administration and now Japan chair at the Hudson Institute think tank.
But Ishiba lacks Abe's trademark charisma, raising questions about whether he'll be able to forge the necessary personal tie to Trump that could determine the quality of U.S.-Japan ties over the next four years.
Bring your wallet. Any reassurance that Trump may offer Ishiba on his regional security concerns likely won't come cheap. Trump's fixation on extracting economic gains from close partners and allies (like those threatened tariffs on Canada and Mexico) means Ishiba should be ready to pay a price for smooth ties.
A summit joint statement will likely include Ishiba's commitment to significantly boost liquid natural gas imports from the U.S., the Japan Times reported Tuesday. Trump may also seek "dramatically increased investment in the United States…[or] increased funding for U.S. bases in Japan," said Hudson Institute's Weinstein.
BEIJING HINTS AT TRADE WAR OFF-RAMP
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China's initial response to Trump's 10 percent tariffs suggests Beijing is pulling its punches to avoid immediately wading into another costly trade brawl with the U.S.
On Tuesday, China struck back at Trump by targeting U.S. imports and rare metal exports and launching an anti-monopoly investigation into Google. But the Chinese tariffs don't kick in until Monday, leaving a small window for possible negotiations that could abort Beijing's measures.
The Chinese government "doesn’t want to take things lying down and be the sucker here but it’s not looking to escalate," said Peter Harrell, former senior director for international economics in the Biden administration. Beijing may be gambling that this sort of calibrated response could lead to "a pause or ideally, withdrawal and settlement" of the U.S. tariffs, he said.
China's response also shows that the Trump administration is facing off with a Beijing much savvier at inflicting pain on the U.S. economy, and with a wider array of tools to do so. The Google probe and the export controls show Beijing's willingness to move beyond the reliance on tariffs to counter U.S. moves.
Beijing signaled that it won't buckle under U.S. pressure. The Trump tariffs constitute "scapegoating" that "will lead nowhere," said Chinese Foreign Ministry spokesperson Lin Jian Wednesday.
TRANSLATING WASHINGTON
— NAVARRO: TRUMP TARIFFS 'GENIUS,' NOT 'CHAOS': Trump White House adviser Peter Navarro is urging patience with Trump's tariff plans. On Tuesday, Navarro pushed back on an assertion by POLITICO's Dasha Burns that Trump was going easy on "adversary" Beijing with a 10 percent tariff compared with a (now delayed) 25 percent tariff on Mexican and Canadian imports.
USTR nominee Jamieson Greer (who faces a Senate confirmation hearing today) will review existing tariffs on Chinese imports "and see exactly what they’ve been doing and have they lived up to the Phase One [trade] agreement that they signed" in 2020, Navarro said. "We’re going to let [Trump] do his thing. It looks like things are a little chaotic. It’s not. It’s genius," Navarro added.
— CHINA COMMITTEE GETS NEW BLOOD: The House Select Committee on China announced six new members this week. GOP Reps. Gus Bilirakis (R-Fla.), Young Kim (R-Calif.), Nathaniel Moran (R-Texas) and Zach Nunn (R-Iowa) have joined the Republican side of the committee's aisle, Chair John Moolenaar said Tuesday. Reps. Greg Stanton (D-Ariz.) and Jill Tokuda (D-Hawaii) fill out the committee's minority roster, ranking member Raja Krishnamoorthi (D-Ill.) said Wednesday. We'll dig into the new members' ambitions for the committee in the coming weeks – stay tuned!
— MEET DARREN BEATTIE, BEIJING BRO: Darren Beattie, the new Acting Under Secretary for Public Diplomacy and Public Affairs, learned the hard way this week that the internet never forgets. Beattie's history of racist and sexist online content sparked an online furor and fueled calls for his ouster from both a Democratic lawmaker and the nonprofit Anti-Defamation League. Those comments aren't surprising considering that Beattie lost his job in the first Trump administration for attending a conference alongside white nationalists.
Beattie also has a history of X posts that contradict key planks of longstanding U.S. policy on China. They include his assertion in May that "Taiwan will inevitably belong to China…it's not worth expending any capital to prevent" and his declaration in 2021 that any Uyghur "who objects to what the CCP is doing should be shamed as a Uiguhr Supremacist."
The uproar over Beattie's role at State prompted a group of "concerned citizens" to start an online petition demanding his dismissal due to his "disparaging remarks about Taiwan and the Uyghur community."
Secretary of State Marco Rubio — who as senator was a strong defender of Uyghurs and Taiwan — expressed support for Beattie on Wednesday. Beattie was "brought on board because he's strongly committed to ending the censorship programs that were being operated out of the State Department," Rubio told reporters.
Taiwan's diplomatic outpost declined to comment.
— HAGERTY SLAMS TAIWAN DEFENSE BUDGET CUTS: Sen. Bill Hagerty (R-Tenn.) wants Taiwan to rethink moves to reduce its defense budget.
The self-governing island's legislature, controlled by the opposition KMT party, voted last month to freeze defense spending. The island's Premier Cho Jung-tai called that move "suicidal." Hagerty agrees.
"I'm deeply concerned … they’re moving in the wrong direction," Hagerty said in an interview. Hagerty warned that Taiwan risks Trump's ire if it doesn't reverse those cuts and pay more for its defense. Trump "wants to see our allies stepping up…and take seriously the threat environment they exist in and to realize that they need to be doing their utmost to pull their weight if they expect other members of the international community to be there to support them," Hagerty said. Taiwan's diplomatic outpost in Washington responded to Hagerty's critique with a statement pledging to "continue to strengthen our self-defense capabilities."
— TRUMP TEASES XI CALL, TIKTOK DEAL: Amid the tumult of the past week — tariffs, Panama, USAID! — were two near-misses in U.S.-China relations. White House spokesperson Karoline Leavitt told reporters Monday that Trump would speak to Xi Jinping "in the next couple of days." Peter Navarro fueled that anticipation Tuesday by declaring that the call would occur that very day. Hours later, the White House dashed hopes by announcing that the call wouldn't occur Tuesday after all and there is no update on when it might occur. By end-Tuesday Trump declared he's "in no rush" to speak to the Chinese leader — POLITICO's Ari Hawkins has that story here.
Trump also sparked speculation that the call would include a discussion on possible terms to allow the sale of TikTok by its Chinese owner ByteDance to comply with a U.S. law requiring its sale. "GREAT INTEREST IN TIKTOK! Would be wonderful for China, and all concerned," Trump said in a Truth Social post Monday. The White House declined to comment.
Chinese Foreign Ministry spokesperson Lin said Wednesday that Beijing seeks "equal-footed dialogue and consultation with mutual respect" when asked about a possible Xi-Trump call.
TRANSLATING EUROPE
— EU CHIEF: CHINA 'DERISKING' WILL CONTINUE: European Commission President Ursula Von der Leyen said in a speech Tuesday that the trade bloc will "keep de-risking" its economic ties with China. Von der Leyen said that strategy aimed to create a "fairer and more balanced relationship" while maintaining key trade and economic ties.
Chinese Foreign Ministry spokesperson Lin responded to those comments Wednesday by saying that Beijing remains hopeful that the EU can become" China's trustworthy cooperation partner."
— EU TARGETS CHINA'S ONLINE SHOPPING BOOM: Chinese online retailers’ flood of low-cost parcels to Europe could be reined in by a European Commission crackdown that would add more customs checks and fees.
A new European Union e-commerce action plan unveiled on Wednesday aims to increase coordination among customs and market surveillance authorities, with tighter enforcement of existing rules and more checks on faulty or counterfeit products. The Commission also pitched a new “non-discriminatory handling fee” to help customs to “properly control” imports, the proposal said. POLITICO's Mathieu Pollet has the full story here.
— ESTONIA SEEKS TAIWAN DRONE PRODUCTION COOPERATION: A visiting delegation of Estonian lawmakers in Taiwan is urging the two countries to cooperate on drone development and production as a defensive move against threats from China and Russia.
"We trust Taiwan and I really hope that Taiwan does trust Estonian companies also for these joint ventures" in drone production, said Kristo Enn Vaga, chair of the Estonian parliament's Estonia-Taiwan Support Group, per Taiwan state media Wednesday.
HOT FROM THE CHINA WATCHERSPHERE
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— PANAMA PORT OPERATOR FACES LEGAL CHALLENGE: Panamanian lawyers have filed a lawsuit to revoke the contract allowing a Hong Kong-based firm to operate two of Panama's five cargo ports. The lawsuit alleges that the contract that has allowed a subsidiary of Hong Kong's Hutchison-Whampoa to run those ports since 1997 is unconstitutional, per The Guardian on Tuesday. The lawsuit follows Secretary of State Rubio's comments last week that those China-linked firms pose an "unacceptable" security risk.
Lin at the Chinese Foreign Ministry shot back by accusing the Trump administration Wednesday of having "intentionally distorted, attacked and mischaracterized relevant cooperation" between Chinese firms and Panamanian authorities.
— SOUTH AFRICA SLAMMED FOR TAIWAN EVICTION: Two GOP lawmakers are warning the South African government to back off on its plan to evict Taiwan's diplomatic outpost from the capital Pretoria. That forced relocation is "deeply troubling, undermines the national security interests of America and our allies, and will deepen tensions between the U.S. and South Africa," Sen. Ted Cruz (R-Texas) said in an X post Tuesday.
That echoed a post Monday by Sen. Marsha Blackburn (R-Tenn.) in which she threatened South Africa with the loss of U.S. trade privileges if it continues to "bully" Taiwan.
The lawmakers were responding to a statement by Taiwan's Foreign Ministry on Sunday that the South African government had demanded that Taiwan's diplomatic outpost "leave the capital city of Pretoria before the end of March" in an apparent nod to Beijing's efforts to diplomatically isolate the self-governing island. The South African embassy in Washington didn't respond to a request for comment.
HEADLINES
The Assembly: How I accidentally became part of China's PR campaign
Financial Times: Trump is sowing the seeds of an anti-American alliance
MIT Technology Review: Four Chinese AI startups to watch beyond DeepSeek
The Times: Why it might suit Donald Trump to sell out Taiwan
HEADS UP
— ACTIVISTS TARGET CHINA'S LONDON EMBASSY PLAN: Representatives of the United Kingdom's Hong Kong, Tibetan and Taiwanese communities plan to protest against a planned new Chinese "mega-embassy" in London on Saturday. Those communities are concerned that the complex will become "the mega hub for transnational repression" efforts by Chinese diplomatic personnel, said Carmen Lau, senior international advocacy associate for the nonprofit Hong Kong Democracy Council and one of the protest's co-organizers.
THREE MINUTES WITH …
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Responses have been edited for length and clarity.
Oklahoma Gov. Kevin Stitt is leading efforts at the state level to fortify against the impacts of a possible conflict across the Taiwan Strait. Stitt talked to China Watcher about his concerns about possible Chinese aggression and the wisdom of "derisking" versus "decoupling."
In June you instructed state agencies to divest state tax dollars from Chinese investments. What's the status of that initiative?
The reports from all the state agencies are due back to me in February. Basically, we wanted to do a kind of [economic] shock analysis of any kind of conflict in the Pacific.
The state treasurer’s office is looking at divesting from different Chinese investments and impacts on the supply chain. What would happen in Oklahoma if there was some kind of Chinese-Taiwan conflict? The fear is the disruption to the supply chain would be Covid times 20.
Won't that divestment end up costing Oklahoma taxpayers money?
One hundred percent not. We’re going to be very cautious on how we’re going to divest. The fiduciary responsibility to our pension funds is not going to change. There’s no fire sale.
This is just being eyes wide open and having all the facts at our disposal. It’s just smart business.
How is Oklahoma uniquely vulnerable to a potential conflict in the Indo-Pacific?
There are companies in Oklahoma that are in the supply chain to Boeing and Spirit Aerosystems and are getting raw materials from China.
If we’re relying on critical minerals from China, that could really put a damper on jobs and bring factories to a halt if all of a sudden you can’t get whatever material that you’re relying on from that [Chinese] supplier. You need to have two or three alternatives. But if all two or three alternatives are located in China, we need to tell people "Hey, let’s look somewhere else."
Do you favor "decoupling" – a wholesale break in economic ties with China – or a more nuanced "derisking" in which the U.S. instead walls off critical technologies from China but otherwise maintains normal trade ties?
De-risking is just good common sense for "America First" and making sure that we’re protecting American interests. But it’s hard to hate someone that you spend time with, and so to totally cut off and isolate from another world power like China would be problematic as well. I think that’ll have unintended consequences. So keeping the relationship open and continuing to meet and talk and trade and have cultural exchanges is just good for diplomacy.
Thanks to: Heidi Vogt, Ari Hawkins, Dasha Burns, Mathieu Pollet and digital producers Emma Cordover and Dean Southwell.
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