“No future” in trade war, China says ahead of Trump announcement
Warning comes as Beijing tries hard to show it is putting the screws to North Korea
After coaxing China to step up cooperation on harsher sanctions on North Korea, the White House plans to go ahead with an announcement of an investigation into Chinese intellectual property theft.
The use of the domestic US Section 301 statute could lead to tariffs on Chinese goods, depending on the outcome, and was cancelled two weeks ago as the US negotiated with China to get on board with the new North Korea sanctions.
While China has endless options to retaliate against the US, which relies on the Chinese market for numerous industries, an apparently de-linking of trade from North Korea cooperation is the right thing for the US to do. China’s North Korea policy will not see any significant shift based on trade threats, as the stability of the North Korean regime is paramount in Beijing’s eyes. Nuclear weapons, which the Pyongyang already possesses, make the Kim regime more secure, not less.
Short of a first strike by North Korea, leading to all-out war, the US strategy is to weaken the North Korean regime to the point it will fail and Kim will be removed by domestic opposition. That is an unacceptable outcome for China, and Beijing would circumvent any sanctions that posed an existential threat to Pyongyang.
Regarding the broader US-China bilateral relationship, the move to go ahead with other policy decisions despite China’s apparent cooperation on North Korea is a smart move on the part of the US. That being said, China is correct in the assessment that the US economy will be the victim of trade action against China. If Washington thinks US companies are treated unfairly in China now, it will only get worse if the Trump administration initiates trade challenges unilaterally using a domestic law.