The US-China Trade War: A Cease-Fire, Nothing More

The Financial Times reported on July 10 that Donald Trump, at his last meeting with Xi Jinping in Osaka in June, promised to “tone down” criticism of China’s actions in Hong Kong in return for progress on trade talks. Such is the way of Donald’s world: Making a deal with authoritarian regimes is always preferable to protecting human rights. Even so, don’t hold your breath on those trade talks; appearances are deceiving. While news reports cited mutual concessions at the sideline of that meeting—Trump permitting resumption of business between Huawei and US technology firms, and Xi Jinping promising to buy lots of US farm products—Trump’s usual comment (“we’ll see”) tells the real story, which is that the two sides agreed to a cease-fire, nothing more.

Here is what the Trump-Xi understanding did not accomplish. First, it did not eliminate current US tariffs of 25 percent on $250 billion of Chinese exports. Second, it only postpones additional US tariffs on the remaining $300 billion in Chinese exports. Third, China has announced no concession on intellectual property rights belonging to US corporations. Fourth, the reprieve granted Huawei is tentative, though it is apparently loose enough to allow US technology companies to seek exemptions that would enable them to resume doing business with Huawei. Still, the company may be hostage to successful completion of the entire trade deal, especially if liberals and conservatives sustain their objections to the reprieve on national security grounds (such as Senator Marco Rubio’s claim the deal was “a catastrophic mistake”).

Trump thinks he’s got China in a bind: The US, he told Fox News, is “taking in a fortune, and frankly [it’s] not a very good thing for China, but it is a good thing for us.” But that’s fake news on two counts: US import duties are not enough to make up for the roughly $28 billion in promised government aid to farmers hurt by the trade war, and China has made up for a good deal of lost business with the US by increasing exports to Europe and Southeast Asia. Meantime, Chinese imports of US goods are way down, especially of soybeans—as much as 30 percent according to Simon Rabinovitch of The Economist. As far as this latest US-China understanding goes, Goldman Sachs was appropriately cautious, saying “No substantive progress was announced on the main issues in the dispute.” Industry leaders, who were nearly unanimous in protesting Trump’s tariffs, aren’t celebrating the new understanding either. They’re reduced to hoping for the best. Good luck.

The politics of the trade war is central to what is really going on. Trump knows he must credibly claim a win to reassure his base, including skeptical farmers, that he hasn’t given anything way as election time approaches. He knows, and the Chinese know, that a Democratic aspirant is in the wings, someone who would be far more open than Trump to negotiating an end to the trade war, even if not to trade frictions.

As compelling a drama as the trade war is, it is only one piece in a troubling overall deterioration of US-China relations. China’s naval advances, US military aid to Taiwan (a new $2 billion sale is in the works), Congressional efforts to limit visas to Chinese students and scholars, political pressure on US universities to close Confucius Institutes and investigate Chinese-American faculty as possible spies, China’s successful push in Europe for its Belt and Road Initiative, warmer North Korea-China ties, differences over Iran, and stronger China-Russia relations are all signs of intensified US-China competition.

The extraordinary Hong Kong demonstrations, which might lead to China’s military intervention to quell, and China’s mass incarceration of Uyghurs and other Muslims—the latter condemned, by the way, by 22 countries (but not one Muslim-majority one) in a letterto the UN High Commissioner for Human Rights—show that, Trump’s accommodating view notwithstanding, the struggle for human rights and dignity must be pursued even at the cost of doing business. (See the powerful essay on Hong Kong by the artist Ai Weiwei on the New York Times site.)

While signs of increased US-China cooperation are becoming harder to identify, cooperation in the pursuit of common interests must go on alongside competition and policy differences. As more than 130 China specialists said in an open letter to Trump, maintaining positive relations with China is essential.

They remind us that China does not seek, and has many liabilities should it seek, global leadership. But it is becoming closer to Russia, economically and militarily, a development surely not in US interests. So it was strange to read a New York Times editorial of July 21 that said: “President Trump is correct to try to establish a sounder relationship with Russia and peel it away from China” –exactly the opposite of what US policy should be. The US has far more interests and opportunities in better relations with China than with Russia, among them the climate crisis, North Korea’s nuclear weapons, and of course trade and investment. And let’s keep in mind that it is Russia, not China, that is interfering in US elections.

Playing up the China threat has lately become standard procedure among liberals and conservatives alike, and has caused most Americans to view China as a rival–a change from past years. But the “China threat” thesis exaggerates Beijing’s intentions, capabilities, and allure. Indeed, the latest Chinese national strategy paper, just released, identifies domestic threats as primary, specifically “separatism.” A foreign policy based on hostility to China endangers national and international security, not to mention the world economy. A cease-fire in the trade war is of little significance unless these other disputes are addressed and diplomacy replaces confrontation.

More articles by:

Mel Gurtov is Professor Emeritus of Political Science at Portland State University, Editor-in-Chief of Asian Perspective, an international affairs quarterly and blogs at In the Human Interest.

Weekend Edition
July 10, 2020
Friday - Sunday
Lynnette Grey Bull
Trump’s Postcard to America From the Shrine of Hypocrisy
Anthony DiMaggio
Free Speech Fantasies: the Harper’s Letter and the Myth of American Liberalism
Rob Urie
Democracy and the Illusion of Choice
Jeffrey St. Clair
“I Could Live With That”: How the CIA Made Afghanistan Safe for the Opium Trade
Vijay Prashad
The U.S. and UK are a Wrecking Ball Crew Against the Pillars of Internationalism
Melvin Goodman
The Washington Post and Its Cold War Drums
Richard C. Gross
Trump: Reopen Schools (or Else)
Chris Krupp
Public Lands Under Widespread Attack During Pandemic 
Paul Street
Imperial Blind Spots and a Question for Obama
Alda Facio
What Coronavirus Teaches Us About Inequality, Discrimination and the Importance of Caring
Eve Ottenberg
Bounty Tales
Andrew Levine
Silver Linings Ahead?
John Kendall Hawkins
FrankenBob: The Self-Made Dylan
Pam Martens - Russ Martens
Deutsche Bank Fined $150 Million for Enabling Jeffrey Epstein; Where’s the Fine Against JPMorgan Chase?
David Rosen
Inequality and the End of the American Dream
Louis Proyect
Harper’s and the Great Cancel Culture Panic
Thom Hartmann
How Billionaires Get Away With Their Big Con
Your 19th COVID Breakdown
Danny Sjursen
Undercover Patriots: Trump, Tulsa, and the Rise of Military Dissent
Charles McKelvey
The Limitations of the New Antiracist Movement
Binoy Kampmark
Netanyahu’s Annexation Drive
Joseph G. Ramsey
An Empire in Points
Kollibri terre Sonnenblume
COVID-19 Denialism is Rooted in the Settler Colonial Mindset
Ramzy Baroud
On Israel’s Bizarre Definitions: The West Bank is Already Annexed
Judith Deutsch
Handling Emergency: A Tale of Two Males
Michael Welton
Getting Back to Socialist Principles: Honneth’s Recipe
Dean Baker
Combating the Political Power of the Rich: Wealth Taxes and Seattle Election Vouchers
Jonah Raskin
Edward Sanders: Poetic Pacifist Up Next
Manuel García, Jr.
Carbon Dioxide Uptake by Vegetation After Emissions Shutoff “Now”
Heidi Peltier
The Camo Economy: How Military Contracting Hides Human Costs and Increases Inequality
Ron Jacobs
Strike!, Fifty Years and Counting
Ellen Taylor
The Dark Side of Science: Shooting Barred Owls as Scapegoats for the Ravages of Big Timber
Sarah Anderson
Shrink Wall Street to Guarantee Good Jobs
Graham Peebles
Prison: Therapeutic Centers Or Academies of Crime?
Zhivko Illeieff
Can We Escape Our Addiction to Social Media?
Clark T. Scott
The Democrat’s Normal Keeps Their (Supposed) Enemies Closer and Closer
Steve Early - Suzanne Gordon
In 2020 Elections: Will Real-Life “Fighting Dems” Prove Irresistible?
Dave Lindorff
Mommy, Where Do Peace Activists Come From?
Christopher Brauchli
Trump the Orator
Gary Leupp
Columbus and the Beginning of the American Way of Life: A Message to Indoctrinate Our Children
John Stanton
Donald J. Trump, Stone Cold Racist
Nicky Reid
The Stonewall Blues (Still Dreaming of a Queer Nation)
Stephen Cooper
A Kingston Reasoning with Legendary Guitarist Earl “Chinna” Smith (The Interview: Part 2)
Hugh Iglarsh
COVID-19’s Coming to Town
July 09, 2020
Richard D. Wolff
COVID-19 Exposes the Weakness of a Major Theory Used to Justify Capitalism