The curtain is soon to fall on the Trump administration’s disastrous China policy, a failure born of an “America First” intransigence that ignored our friends and didn’t leverage them into the broader coalition necessary to address a changing China. Although the Trump administration inherited a broken U.S.-China relationship, its policies have been chaotic and inconsistent, and ratcheted up mutual antagonism with no gains to show for such turmoil.
The Trump administration’s failed China policy has adversely impacted Washington state. Its businesses, large and small, benefit from bilateral trade in terms of the goods and services exchanged as well as the logistics ecosystem supporting such trade. The job impacts are significant, as economist Spencer Cohen noted, “Containerized cargo, primarily linked to China, in 2018 directly supported nearly 15,000 jobs in the Greater Seattle area.”
In 2019, the export of Washington products subject to China’s retaliatory tariffs declined by 23% compared to 2018 levels, according to the Washington Council on International Trade. The pain was felt across the board: Exports of manufactured products, ultrasound equipment for example, decreased by 16%. Agricultural or cultivated products such as wheat were down 21%, and certain types of cut lumber fell by 54%. As of September 2019, exports to China via the Port of Tacoma, the Port of Seattle and Seattle-Tacoma International Airport saw even steeper declines from 2018, including “salmon (-47.71%), cherries (-54.56%) and fresh crab (-63.34%),” according to The Northwest Seaport Alliance.
As lawyers with a combined six decades of experience advising American companies doing business in China, we know that a stable trade policy is vital to making long-term business decisions. Our strong Pacific Northwest ties played a key role in setting us on China-related paths and informing our understanding of the importance of these points. One of us benefited from the University of Washington’s Jackson School of International Studies’ strong China studies capabilities before studying law and practicing in China for more than a decade. The other spent his early career in Seattle, with this trade-dependent region heightening an awareness of the importance of stable trade policy. That exposure helped shape a career advising on doing business internationally, including with China.
Our experience guiding American companies in China’s opaque and increasingly nationalistic environment shapes our assessment of where the Trump administration has failed and where a Biden administration could succeed. The key differentiator is President-elect Joe Biden’s appreciation of the effectiveness of a multilateral approach to the world’s thorniest problems. In Biden’s words, “America will lead by example and rally the world to meet our common challenges that no one nation can face on its own.”
A multilaterally-oriented approach recognizes that China and the U.S. operate in a global system and not in a two-way vacuum. This approach can reassure our friends, as they would no longer view U.S. foreign policy with a suspicion created by enduring a feckless leader attuned only to his personal whims. Applying that approach to China will not only advance more constructive engagement, but will also aid in rebuilding America’s global standing.
The China “issue” isn’t ours alone, of course. China’s engagement with the world implicates trade and investment, and a range of vital matters, including high-tech IP theft, territorial claims stoking considerable tension with China’s neighbors, overseas political influence campaigns, inhumane treatment of its Uighur citizens and squelching of free speech in Hong Kong.
Our allies share these concerns. China’s recent actions toward Australia underscore the weakness of the Trump administration’s approach. Australia has supported U.S. policy with China and argued for an independent investigation into the World Health Organization’s early COVID-19 pandemic dealings with China. In response, China launched a series of brutal trade sanctions that U.S. policy left to Australia to confront alone. And last month, China’s Foreign Ministry asserted a litany of alleged wrongs Australia has committed, stating that the responsibility for Sino-Australian tensions was entirely Australia’s.
The Wall Street Journal has suggested that Biden’s China policy would be a continuation of Trump’s. We disagree because a Biden multilateral approach promises to be broader, more inclusive and, in the end, more effective. Rather than leaving allies like Australia at the mercy of China’s scapegoating and trade sanctions, Biden understands the imperative to stick together, and has stated, “[We] poked our finger in the eyes of all of our allies out there … The way China will respond is when we gather the rest of the world.”
In gathering the rest of the world, the Biden administration would focus on better coordination among our friends and allies on issues, including trade and investment. There are several steps wherein a multilateral approach could help build momentum toward a more effective China policy.
The U.S. imposed tariffs on Chinese products without first informing our allies, leaving them to bear the brunt of Chinese economic retaliation. This failure to coordinate provided the Chinese government with the opportunity to impact our allies one-by-one, as they did with Australia. Multilateral coordination on trade actions would limit retaliation by China against a specific coalition member and could amplify the impact of such actions.
Our dependence on supply chains that start in or go through China provides the Chinese government with serious leverage and exposes the U.S. and its allies to significant risk. For security and trade reasons, we should work with our friends and allies to develop resilient supply chains that reduce dependency on China, on items from rare earth minerals to personal protective equipment. This will require a sustained and deliberate multilateral effort.
Our friends and allies share our core human-rights values and decry the treatment of the Uighurs in Xinjiang, pro-democracy politicians and protesters in Hong Kong, Tibetans, as well as the crackdown on LGBTQ persons. Our voice on human rights has little impact, alone, when we have human-rights challenges in this country and sweep aside human-rights concerns when China comes to the negotiating table. The cause of human dignity requires many voices speaking as one.
A multilateral approach is required to pressure China to stop subsidizing coal exports and stop financing billions of dollars of high-pollution energy products through its Belt and Road Initiative. We need to work with friends and allies, like Australia, to limit the spread of the worst polluting aspects of the Belt and Road Initiative.
A multilateral approach promises to untangle the knot that sits at the center of the tangled ball of Trump’s China policy: Countries falling into line with the U.S. risked being hung out to dry when China retaliates. The Biden administration would understand that effective policy requires weaving together a consensus to tackle this China challenge.
There is much the Biden administration needs to fix after the past four years. There is no guarantee that China-focused Washington businesses will not be impacted by efforts to pursue a new understanding between China and its international partners, but if business is to be disrupted, let there be some larger strategic aim in play, rather than the mercurial musings of a man who sees all transactions in a “I win-You lose” calculus. The prospect of an administration that recognizes the need for allies to work together offers hope for a more realistic, coherent and ultimately constructive China policy for America and our friends.