Before the Iran war became a quagmire, American optimism surrounding President Donald Trump’s trip to China — this Wednesday to Friday — was high. The expectation was that Trump would negotiate from a position of strength because of U.S. supremacy in artificial intelligence and advanced technology.
Now, however, as the Iran war drags into its third month and the stalemate over the closure of the Strait of Hormuz continues, China experts and many Americans worry that Trump, in pursuit of short-term symbolic victories on trade, particularly agriculture, and commercial aircraft, could make long-term strategic concessions to China.
Because of continuing weakness in the Chinese economy caused by the collapse of the residential real estate sector and a bankrupt state banking system, Chinese President Xi Jinping’s top priority is securing greater stability and predictability in China’s trade relationship with the United States. China remains heavily dependent on its export economy. In turn, Beijing will push for lower tariffs on Chinese exports to the U.S. China especially wants access to American markets for its excess production of manufactured goods, including electric vehicles. Unfortunately, Trump has signaled that he may be open to such an arrangement.
Xi is also expected to press for concessions on Taiwan, the most sensitive issue in Chinese foreign policy. China wants changes in U.S. language regarding support for Taiwan. Xi will likely seek an explicit statement that the U.S. opposes Taiwanese independence and accepts that China and Taiwan will eventually be reunified. China may also offer assistance in reopening the Strait of Hormuz in exchange for restrictions on U.S. military sales to Taiwan.
Next, China wants greater access to advanced American technology, especially in artificial intelligence. Beijing publicly claims it does not need Nvidia’s most advanced accelerated computing technology, but Chinese companies continue to go to great lengths to smuggle Nvidia chips into the country. China also continues to steal American intellectual property and technology.
Finally, China wants recognition as a global equal. Trump’s eagerness for the summit already provides Beijing with a visible propaganda victory. By hosting Trump, China can demonstrate to both its domestic audience and the broader world that China and the U.S. are coequal superpowers.
But Trump must remember that China is an existential adversary of the U.S. and cannot be trusted to abide by trade agreements. In addition, the naval blockade of Iran is working. The Iranian economy is collapsing, and the U.S. should remain patient rather than seek China’s assistance in the Iran war.
GOP TORN BETWEEN AGRICULTURE AND MAHA OVER GLYPHOSATE
Short-term economic gains must not come at the expense of long-term strategic objectives.
China hawks are correct: The U.S. should continue to decouple economically from China and deny Beijing access to American technology and intellectual property. That must remain the foundation of American policy toward China.
James Rogan is a former U.S. foreign service officer who later worked in law and finance for over 30 years. Now he writes a daily note on markets, economics, politics, and social issues.