To evaluate the effectiveness of former president Trump’s China trade policy, we need to focus on the following:
Deficit gap
In 2016, presidential candidate Trump promised a significant reduction of trade deficits, which was a cornerstone of his America First platform. Then, a pandemic overshadowed everything shortly after the signing of a US-China trade deal in Trump’s White House on January 15, 2020, which was supposed to make China a big buyer and the US a big seller. It didn’t pan out the way Trump promised America, however. At the end of his presidency, China’s trade surplus still ended up at a near-record level. Defeating the purpose of the aforementioned trade deal, China goes on selling big while the US keeps buying big. The deficit gap remains more or less the same.
Jobs for the US
Trump boasted a return of jobs to America from overseas when waging a tariff war against China. Yes, China was hurt but it was largely due to the pandemic. America did not fare better, either, as the pandemic respects no national boundaries. Even in the absence of the pandemic, there is no reason to believe that America could or would turn itself into a workshop like China did. This must be bad news to Americans coming from former factory towns. A recent movie, Nomadland, tells us just that.
Containment of China
The downgrading of Huawei got Trumpsters pretty excited. No doubt, Trump won the Huawei battle. The war? Not yet. It is one thing to put Chinese companies on Washington’s entity list, it is another thing to keep American technologies safe from China. Why? Because the American elites, by and large, still think that China should be engaged constructively while making handsome profits themselves. Indeed, despite Trump, a total of US$ 1 trillion had been invested in the Cayman Islands by American holdings of securities labeled Chinese versus a total of US$ 500 billion under Obama. Trump had little control over the elites. It is anybody’s guess what China would do with the Cayman windfall, but it is a safe bet that the People's Liberation Army would be a chief beneficiary. Beijing would also feel easier to finance its operations targeting American technologies.
Trump's China trade policy did not amount to much. He failed to win the elites over to his side. Still, Trump won enough grassroots to get tough with China. That is his legacy.
--- by Lingyang Jiang
