Two weeks ago, many media outlets declared that the “short unexpected honeymoon China enjoyed with Trump seems to be in trouble” after Trump tweeted, “While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out.” Our June 23 China This Week newsletter detailed disagreement on how much weight should be given to President Trump’s tweets when assessing the state of the diplomatic relationship between Beijing and Washington. However, Trump struck the same tone ahead of a meeting with President Xi on the sidelines of the G20 summit in Germany, tweeting “Trade between China and North Korea grew almost 40% in the first quarter. So much for China working with us - but we had to give it a try!”
Unlike the relatively smooth lead-up to the first summit between President Xi and Trump last April, the U.S. enacted two significant policy changes toward China: first by placing sanctions on a number of Chinese businesses that trade with the DPRK, and also by completing a weapons sale to Taiwan. Recent actions by Secretary Tillerson and U.S. Ambassador Nikki Haley show that cabinet-level officials are also sharing Trump’s frustration with China in trying to contain North Korea’s development of nuclear weapons. Tillerson recently downgraded China in a human trafficking report for concerns about North Korean labor crews in China that are contracted through Pyongyang and provide currency for the North Korean leadership, and Haley strongly condemned China’s trade with North Korea saying, “There are countries that are allowing, even encouraging trade with North Korea, in violation of U.N. Security Council resolutions. Such countries would also like to continue their trade arrangements with the United States. That’s not gonna happen. Our attitude on trade changes when countries do not take international security threats seriously."
Chinese scholars maintain that a peaceful resolution is possible, again proposing a “dual track” solution in which North Korea stops weapons tests in exchange for the U.S. and South Korea to cease regional military exercises. This solution echoes Beijing’s interests in avoiding a messy refugee crisis or a nuclear fallout in their own backyard. In a Los Angeles Times op-ed, Doug Bandow of the Cato Institute argues that unilateral pressure on North Korea will not work. “The Trump administration must therefore convince Xi’s government that punishing North Korea benefits China.”
While it is clear that the brief honeymoon between Trump and China is over, many expect future points of friction in areas of trade--especially as the 100-day trade plan concludes July 16th. Axios predicts that “the [Trump] administration is headed toward a more tailored approach that targets China and countries through which it trans-ships steel — Vietnam, for example. That could include possible tariffs, based on unfair trade practices, like dumping.” Meanwhile at the G20 summit in Hamburg, President Xi made a jab at Trump’s “America First” policies, for “stoking geopolitical risks through calls to reverse globalization and return to protectionism.”
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