It is very difficult to predict Donald Trump's policy, especially his foreign policy. The president-elect never systematically elaborated it. His speeches were made on the spot. His statements often contradicted each other. As a businessman, he is not familiar with diplomacy. According to his White House chief of staff, getting familiar with diplomacy will be one of four priorities in his first hundred days in office. And we still know little about his aides and staff. But I would like to attempt a prediction of Trump's China policy on the basis of his few words and 'first 100 days' agenda plus the Republican Party's program and statements and articles of Trump's advisers.
It has been 37 years since China and the US normalized their relations. In those years, major changes have taken place in both the international and domestic situations of both countries. However, no matter how the situation changes, the two countries need each other. Cooperation benefits both while fighting harms both. Cooperation has thus been the mainstream of China-US relations. Given the state of the bilateral relationship in the past 37 years and the extensive cooperation between them, we have confidence on this point.
Trump stresses 'America first' and prioritizes defense of American interests. He will not seek strategic expansion and may even engage in certain strategic contraction. Actually Obama also practiced strategic contraction globally and expanded only in a priority region (Asia Pacific). Trump is not an 'isolationist'. We must not magnify some of his more inward-looking statements. Henry Kissinger categorically said that isolationism is not an option for the US. Trump may make some readjustment to America's alliance relations but he will not fundamentally change the alliance system, which is an all-too-important strategic asset for the US.
In Asia, America's alliances with Japan and the ROK have existed for over 60 years and are essential to America's status in the Asia Pacific region, the US-Japan alliance in particular. Strengthening US-Japan relations has been a consistent bipartisan policy of three presidents since the end of the Cold War (Clinton, Bush and Obama). It's impossible for the alliance relationship to experience drastic changes in Trump's term. But what Trump often says is to the effect that nobody can take advantage of America. It is completely possible that he may bargain with allies for them to bear more costs. Such a policy will have a direct bearing on China's surrounding environment. He will not use the Obama administration's term of 'rebalancing' Asia Pacific but may not necessarily reduce American military presence in the region. Trump's doctrine is 'peace through strength'. Not satisfied with Obama cutting military expenditure, he said he would rebuild American military, increase naval ships to 350 from the current 274 and make America strong to the extent no one dares to make trouble for the US. In this connection, we must not let down our guard.However, Trump can also not afford the risk of worsened relations with China. In particular, the US is now experiencing fiscal difficulty and internal division. There is no basis for a policy that would worsen US-China relations.
During the campaign, Trump talked more about trade and about the loss of jobs in the US, sometime using rather high-sounding words. Will a trade war break out between China and the US during Trump's term? Not very likely. Economic interdependence between the two countries is already rather deep. Last year, two-way trade was over $558 billion. Direct American investment in China was over $70 billion and China has become some companies' main source of revenue. Chinese investment in the US has also increased rapidly in the past two years, accumulating to more than $46 billion by the end of 2015. Over 70% of China's 3.1 trillion foreign exchange reserve was in US dollars. China has been the largest overseas holder of US Treasury Bonds for many years and still holds $1.22 trillion. These figures suggest that neither country may do without the other. It is quite impossible for Trump to levy a 45% import tariff on commodities imported from China. As a shrewd businessman, he knows too well that both sides will sustain great losses in a trade war. He has said as much after all. So it will be unlikely for him to do such a thing. Hence economic and trade frictions between the two countries may increase. Levying anti-dumping and countervailing duty over some imports from China is possible, as the Obama Administration has already done. But that will have to be determined on a case-by-case basis. China and the US are both WTO members. If the US imposes high duties on China, China may use legal means and complain at WTO. China has gathered some experience in this regard in recent years and many complaints have been successful. Of course we hope to see less friction but it's only natural to have some friction.
Trump promised in the campaign to rebuild America by constructing infrastructure on a large scale, including airports, railways, bridges and highways, so as to revitalize the economy and create jobs. This actually will produce opportunities for China-US cooperation. China has money, technology and talented people in infrastructure construction. The two countries may well cooperate through some commercial arrangement. Naturally there is a need to exclude political interference.
Trump is a businessman, who values solid interests. He will also focus his attention on domestic affairs rather than having a strong impulse to expand American-style democracy overseas. Human rights pressure on China is likely to decrease.
The Taiwan question remains very sensitive. Trump rarely talked about Taiwan in his campaign except for some casual references to job losses. But Taiwan occurred more prominently in the Republican Party's campaign program and the basic tone was to upgrade the US-Taiwan relationship. It is hoped that Trump will get familiar with the Taiwan question quickly, understand its ins and outs and its significance to US-China relations and cautiously handle related issues such as arms sales to Taiwan, Taiwan's international participation and Taiwan officials' visits to the US. He should not make hasty moves, and should not take detours like the George W. Bush administration, which came to opposing 'immediate independence' only after several years of conniving by the DPP authorities.
America is now in transition, not only from the Democratic Obama administration to the Republican administration of Trump. It is also for Trump a period of transition from being a 'rebel' to being the 'authority'. During the campaign, to win votes, he delivered some radical rhetoric and made some obviously unachievable promises. When in power, he will have to face reality. He will need time to familiarize himself with and understand China-US relations before truly exercising his policies. It is hoped that during Trump's term the relationship will continue moving forward.
