President-Elect Donald Trump made waves last week by accepting a phone call from the newly (democratically) elected president of Taiwan, Tsai Ing-wen. The Washington establishment and mainstream media let out a collective shriek as they wailed Trump was undoing decades of American foreign policy tradition since the Carter administration, which held that the United States would refuse to officially recognize Taiwan in deference to the “One China” myth perpetuated by the autocrats in Beijing.
However, there’s a new sheriff in town.
It shouldn’t be a surprise that the ultimate outsider candidate was willing to buck the foreign policy establishment in his first month after being elected. After all, during the campaign, Trump branded China a currency manipulator, accused them of stealing American manufacturing jobs, and promised consequences for China’s blatant theft of American intellectual property. Given Trump’s tough talk about China on the campaign trail, many prognosticators predicted that China would challenge a Trump administration in the first few months–and though that may still occur, few predicted that Trump would fire the first shot.
Trump’s call with President Ing-wen showed the hypocrisy of American foreign policy toward Taiwan. Despite the fact that through October 2016 the United States has imported $32.5 billion and exported $21.3 billion in goods to Taiwan (in addition to the $1.6 billion provided in military aid this year), the official position of the State Department is that Taiwan is not an independent state. Put another way, since 1979 the State Department has refused to acknowledge a democratically elected government in southeast Asia, where they are few and far between, to avoid angering a Communist autocracy insistent on dominating the region. Trump’s pushback against the “One China” myth represents a restoration of common sense. It’s been said that the State Department should have an “America Desk,” just to ensure they remember the interests of the people and nation they are supposed to serve. It’s naïve to think that China’s interests align with those of the United States in many arenas.
The Obama administration’s approach to China is similar to that of an older brother who fears his younger brother is catching up to him athletically, and does everything possible to avoid an athletic matchup. China’s military buildup and construction of islands in the South China Sea was met with a stern warning (similar to the Syrian “red line”), and has naturally continued unabated. China’s poaching of American manufacturing was answered by the Obama administration crippling American manufacturing by forcing them to comply with environmental standards ignored by China (and thus encouraging them to move jobs overseas). China’s theft of American intellectual property, currency manipulation, and cyberattacks on the United States were met with protestations and meaningless agreements, but no action. It speaks volumes that the day after President Obama and President Xi Jinping signed a treaty to halt cyber attacks in October 2015, there were two cyber attacks on American companies the next two days, and several more in the following weeks. At every turn, the Obama administration has meekly chosen non-confrontation, further emboldening Beijing to push the envelope further.
This is precisely why Trump’s call with Ing-wen was so important–it signals strength and fundamentally changes America’s relationship with Beijing for America’s benefit. No longer will the United States project weakness to China, and Trump’s call shattered the stagnant status quo of American foreign relations with China.
Trump should use the uncertainty that his election has brought to Beijing to bring China to the negotiating table. Beijing values predictability above all things in its foreign policy, and Trump should demand a steep price from China in exchange for a predictable and amiable foreign and economic policy. In particular, Trump should demand three conditions.
First, China must cease all military buildup in the South China Sea and respect international waters and freedom of navigation. Over $5 trillion in trade passes through the South China Sea each year. That trade route has been protected since World War II by the United States Navy in conjunction with allies in the region, and Chinese military buildup in the region could allow their growing navy to hold trade hostage.
Second, China must cease all state-sponsored cyber hacking of American companies. It is estimated that cyber crime costs U.S. businesses at least $250 billion per year, and China is the biggest culprit. The Virginia-based cyber security firm Mandiant estimates that since 2006, a single Chinese army cyberattack unit has compromised 141 companies spanning 20 major industries, from information technology and telecommunications to aerospace and energy. American firms such as U.S. Steel and American Semiconductor were hacked in 2011 and found Chinese firms selling their steel and wind turbine software at a lower cost.
Finally, China owns an estimated $1.3 trillion in U.S national debt, which I see as the most important issue to the millennial generation due to the impact the current debt levels will have on our future tax burden and economic freedom. Though it will require tense negotiating, Trump should demand that China write off the amount stolen from American companies due to cyber attacks from the national debt. Bryan Dean Wright (a Democrat) has an interesting take on this in a December 6th article, linked below.
In exchange, Trump can offer China a continuation of the current tariff rates (around 3%, but higher depending on the product) on Chinese imports, rather than establishing a 35-45% tariff on Chinese goods as he has suggested, to go along with the continuation of the “One China” myth as stated U.S policy. If Trump cuts the American corporate income tax rate from 35% to 15%, he will not need to impose a higher tariff on Chinese goods to protect American manufacturing due to the re-investment in American business that will occur.
China will realize that it is in their best interests to avoid a trade war with America that will result from heavy tariffs, and the last thing that Beijing wants is a military conflict with the United States. If Beijing really values stability above all else, which they have demonstrated over the past two decades, Trump will be able to force them to pay the price, which will go down as the greatest foreign policy achievement since the fall of the Soviet Union.
With one simple phone call to the president of Taiwan, Donald Trump has changed the nature of America’s relationship with China, to America’s benefit. With his projection of strength, he has laid the foundation for a China policy focused on protecting global trade, American intellectual property, and future generations of Americans.