CHINA’S foreign ministry said its One-China policy isn’t negotiable and urged Donald J. Trump to recognize the “high sensitivity” with which it views Taiwan, a day after the president-elect hinted for the second time in a month at a reset of US-China relations.
Trump was quoted by the Wall Street Journal late on Friday as saying he would only commit to the One-China policy after assessing the progress the world’s second-largest economy makes on trade and currency issues.
“The One-China principle, which is the political foundation of the China-US relations, is nonnegotiable,” Ministry of Foreign Affairs Spokesman Lu Kang said in a statement on the agency’s web site.
One China is an acknowledgment that Taiwan and China are part of the same China, even if they disagree on what that means. Beijing regards it as a bedrock policy, not the bargaining chip that Trump has suggested.
President Barack Obama has cautioned his successor against lightly abandoning Washington’s stance on the delicate topic.
“In order to avoid disruption to the sound and steady development of the China-US relations and bilateral cooperation in key areas, we urge relevant parties in the US to fully recognize the high sensitivity of the Taiwan question, approach Taiwan-related issues with prudence and honor the commitment made by all previous US administrations of both parties on adhering to the One-China policy,” Kang said in the statement.
Currency action
The president-elect told the Wall Street Journal he isn’t prepared to declare China a currency manipulator immediately upon being sworn in on January 20. Trump threatened during his campaign to brand China a currency manipulator immediately upon taking office, and to slap 45-percent tariffs on its exports to the US.
“I would talk to them first,” Trump was quoted as saying. “Certainly, they are manipulators. But I’m not looking to do that.”
Trump has questioned the US’s long-standing policy of recognizing Beijing over the government in Taiwan, and criticized China for a perceived failure to further pressure North Korea over its nuclear program.
The president-elect caused concern in Beijing after a 10-minute phone call in early December with Taiwan’s President Tsai Ing-wen, the closest a Taiwanese leader has come to getting formal recognition from Washington since the US established ties with the Communist government in Beijing almost four decades ago.
Trump’s pick to lead a newly formed White House National Trade Council, Peter Navarro, a University of California at Irvine economics professor, is a frequent critic of China’s trade practices.
No need for tariffs to get ‘tough’ on China
UNITED States officials can get tough on China without imposing tariffs, US Commerce Secretary Penny Pritzker said, cautioning the incoming Trump administration against stoking a trade war that could hurt the world’s two largest economies.
“What I object to is the idea that we’re just going to slap a tariff on everything that we buy from a country,” Pritzker said in an interview on Friday in her Washington office.
“That’s not going to work—that leads to a trade war. I’m all for being tough when our companies are not being treated fairly, but I think we have to think about what does ‘tough’ mean so we don’t then find ourselves in a negative cycle.”
The Commerce chief’s comments are at odds with President-elect Trump’s positioning on trade, which has rallied some Americans to support a more protectionist stance in an attempt to revive US manufacturing and boost domestic jobs and wages.
Trump’s nominee to replace Pritzker, billionaire investor Wilbur Ross, last year co-authored a paper calling China the world’s biggest trade “cheater”.
While Trump and some of his advisers have threatened tariffs on alleged trade-rule breakers, other members of the incoming administration have tried to ease fears of a trade war by enunciating that the duties might only act as a bargaining chip for better deals.
Trump’s personnel moves have raised concern about big policy changes. He has created two unique positions aimed toward renegotiating trade deals, installing Peter Navarro, a career critic of China trade practices, as the head of a new trade council within the White House.
He also picked Jason Greenblatt, chief legal officer for Trump Organization Inc., to be a special representative for international negotiations.
FX manipulation
Navarro has argued that China is violating international trade rules on four fronts: intellectual property, currency manipulation, export subsidies, and worker and environmental standards.
Pritzker echoes at least some of those challenges.
“We have to be firm about intellectual-property protection, about market access, about trade-secret protection, about a level playing field for American businesses to compete,” Pritzker said. “China is no exception, and we have lots of challenges with that.”
Asked about Navarro’s appointment at a regular briefing in Beijing on December 22, Chinese Ministry of Foreign Affairs Spokesman Hua Chunying said the country was paying close attention to Trump’s transition effort.
‘Common interests’
“What I want to stress here is that China and the US are two big countries and have a lot of common interests,” Hua said. “Cooperation is the only correct choice for both nations.”
Exactly how the bartering with China will play out under the new administration remains murky ahead of Trump’s January 20 inauguration. Some members of his team have said that tariffs won’t be the first step in the process.
“We want to start with carrots,” Anthony Scaramucci, the founder of SkyBridge Capital who will be an assistant to Trump in the White House, said in a December 1 interview with Bloomberg Television. “If we’re going to get some contention related to trying to make those deals fairer, so that our goods and services can leave the United States in the same proportion that they’re coming in, then the cudgel of a tariff is something that we on the administration side would be willing to impose as a sort of negotiating chip.”
Projections on the impact of Trump’s economic policies also have divided forecasters at major banks. Bank of America analysts project trade tensions will provide a negative shock to the economy this year, while Deutsche Bank economists see his deregulation and tax reform lifting US growth in 2017.
Image credits: AP/Ng Han Guan