China 'Not Desperate' for a Deal With US, Experts Say
Authorities in Beijing watching the Trump administration "sabotage itself" with tariffs on allies and redefinition of the international order are in no hurry to establish a U.S.-China trade deal, experts said at a March 31 event.
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"China realized that if the United States is withdrawing from a lot of international institutions, and if the United States is actively or the current administration is actively damaging, potentially sabotaging the role of the U.S. dollar, and sabotaging the American Alliance system, and America is trying to redefine the international order, perhaps China is going to do exactly the opposite," said Zongyuan Zoe Liu, a senior fellow at the Council on Foreign Relations. "So from that perspective, if I were Beijing, why am I going to be desperate for a deal?"
Liu, speaking at the CFR's panel on the future of U.S.-China relations, said that China was prepared for a rekindling of the trade war with the U.S. under Donald Trump: "this round is not a surprise for Beijing." China has been preparing its economy for the resumption of hostilities, she said, and "has accumulated a lot of experience to deal with escalating trade tensions" while also reducing "its vulnerability against Western economic coercion, including building an alternative regime-based financial system."
All of these preparations mean that "if U.S. policymakers, or if the Trump administration, think that it could, or America could force China into a deal, I do not think that is going to happen," she said.
China also will not want to appear as if it caved to pressure from Trump and his bullying tactics, moderator Rush Doshi of CFR said: "No Chinese leader can easily come to the table in a position of weakness after having tariffs raised on them." Liu agreed, saying that Chinese leaders will be unwilling to come to a negotiation table "with [their] hands tied."
Liu said that the Chinese government will avoid "large public embarrassment" such as caving on the Panama Canal, leading Doshi to speculate that "maybe it's impossible, for reasons related to, not the bargaining space, but related to politics, for there to be an easy deal in the near term."
Jeremie Waterman, president of the U.S. Chamber of Commerce's China Center, said that on his recent trip to China, officials had a new "sense of confidence" about their dealings with the U.S. He said that he got the impression "that China was going to try to take advantage of the sense that U.S. policy is very much in flux," in terms of "new approaches to allies and partners."
He said that Chinese leadership was watching and waiting to see how other countries respond to U.S. tariffs and potentially looking to increase Chinese market access in those countries as they shift away from the U.S.
Should China decide to deal in earnest with the U.S., Waterman said, China has options on the table: "I think there are areas where China could take actions now: for example, to complete its compliance with the phase one deal, the January 2020 deal. There are areas where China had made commitments to purchase [U.S. products]."