December 6, 2017

I don’t know much about China, but I know a few things.

  1. China refuses to recognize Taiwan as a sovereign country.
  2. The concept of “saving face” is a big deal in Chinese culture.

So if an American president decides he would like to chart a new course, they are free to do that. More specifically, if Trump decides he’s going to recognize Taiwan as its own country, that’s within his right.

But there are two other angles to consider. First, is it good policy? Second, what’s the best possible way to negotiate a change like this? Let’s walk through the rosiest possible scenario first, then look at the more gloomy ones.

In Trump’s perfect world, the US thumbs its nose at China by recognizing Taiwan which gives us additional leverage against the Chinese government. With that leverage, we’d stop their currency manipulation, heavy import taxes, and China would stop their military buildup in the South China Sea. All of these concessions would be made without China retaliating in any way.

In a less-rosy picture, the US thumbs its nose at China which makes it even more unlikely they’re willing to make deals with us. They increase tariffs. They escalate their military build-up. They continue or worsen their currency manipulation. And a laundry list of other topics, such as human rights violations, get no attention whatsoever.

If Trump were to defend this strategy, he’d argue that being unpredictable is an asset in a negotiation like this. But I’m guessing I could talk to 1000 professional diplomats and China scholars who would all universally agree the way to get concessions from China is to start by doing anything — *anything at all* — other than trying to shame them publicly via Twitter. It just doesn’t make any sense or align with anything we have ever seen from working with that government. Or any government. Or any human. It’s just a bad tactic.

Which lead to these quotes from Chinese editorials today:

  1. “Trump may dislike, distrust the diplomatic establishment in Washington D.C., and aspire to rework U.S. foreign policies. But he should first come to terms with the real, not imagined, reality of international relations before wielding the scalpel, because a misstep as president will be far more damaging than one as president-elect.”
  2. “To stop acting like the diplomatic rookie he is, the next U.S. president needs help in adapting to his forthcoming role change. Otherwise, he will make costly troubles for his country, and find himself trying to bluster his way through constant diplomatic conflagrations.”
  3. “An irrational and hasty “get tough with China” policy would be detrimental to U.S. long-term interests… Not only is the U.S. more dependent on China than Trump seems to realize, but world peace and prosperity depend on the healthy development of China-U.S. relations. Trump needs to get the China-U.S. relationship right.”
  4. “Trump’s China-bashing tweet is just a cover for his real intent, which is to treat China as a fat lamb and cut a piece of meat off it. Trump wants to revive US economy, but he knows that his country is not as competitive as it used to be. He is trying to pillage other countries for the prosperity of the US. Trump seems to be wanting to make the US a new economic empire in the 21st century under his leadership, which is about to smash current world economic order. However, he doesn’t know that the US is the biggest beneficiary from the current world order, and he wants to reshape the world order into a winner-takes-all one.”

Most Americans won’t read these quotes, of course. And the intellectual class will be divided on whether his moves are really so bad. So Trump will have some wiggle room with regards to how his leadership is perceived in the United States in the short term, notably with his media-shunning fans.

But if his fans see prices spike because of a trade war, that’s going to be hard to explain away. All the analysis in the world can’t match the visceral shock that an economic meltdown would bring. So that should be his number one goal. Bring change, yes. But if it hurts everyday Americans, he will have miscalculated badly.

Additional odds and ends:

  • As of today, Hillary’s lead is up to 2.7 million votes.
  • 49% of those polled think Trump’s tweeting is a bad thing. 23% said it’s a good thing. 56% of voters think Trump uses Twitter too much, and 37% of his own voters say the same. Only 16% think he tweets the right amount.
  • Today Trump promised a deal with the Softbank CEO, who owns Sprint. This was Trump saying he’s not going to block the merger of T-Mobile and Sprint. We’ll see if Trump voters see that as helping average Americans or just helping companies.
  • Boeing executives criticized Trump’s policies so he fired back at them on Twitter and said their Air Force One contract should be canceled. The stock went down, but then gained back much of its losses.
  • Obama gave his last national security speech today. He stressed that while terrorists are a concern, they’re not an existential threat. You’re more likely to die in the bathtub than from a terrorist attack. But by exaggerating their importance, we make them seem much more appealing to the discontented and much more frightening for everyday Americans. He’s clearly hoping Trump won’t dive into the very first confrontation he sees. But I think everyone sees where this is going.
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