The trade statistics from the U.S. Commerce Department indicate that — on Trump’s watch — China pocketed a U.S. trade surplus of $829.3 billion between January 2017 and January 2019 (the latest U.S. data point available).
I believe that the Chinese are making a mistake by challenging the U.S. on such a sensitive issue. Granting that Washington may have gone too far in its attempts to control China’s economic policies, Beijing still could have – and should have – preempted all that by reducing its sales to the U.S. while stepping up purchases of American goods and services. That would have shown Beijing’s determination to substantially run down its excessive, and unsustainable, surpluses on U.S. trades.
Had Beijing made such a gesture of smart statecraft, it would have smoothed the way to a fast and reasonable trade agreement. And it is quite possible that such a gesture could have also opened up a new chapter of friendlier, more cooperative and more productive bilateral relations.
Indeed, Chinese President Xi Jinping cannot expect his idea of a “great power relationship” to work while China continues to maintain an excessively unbalanced trade relationship with the United States.
Beijing, of course, has its own reasons for doing what it’s doing, and its attitude on trade issues reflects a much broader view of its relations with Washington.
It is also very likely that China could have been encouraged in its intransigence on U.S. trade by the fact that America’s close friends and allies are all flocking to Beijing in search of trade and investments.
China has now become the EU’s second-largest trade partner, closely behind the United States. Beijing’s share of EU trade has tripled since 2000 to 15.4 percent, and is now only slightly below the U.S. share of 17.1 percent. The big difference is that last year the EU ran a 184 billion euro trade deficit with China, while recording a 140 billion euro trade surplus with the U.S.
A recent visit to Europe by Xi in late March followed by last week’s visit of Chinese Premier Li Keqiang are the latest indications of how much the U.S. “trade war” with China differs from majestic welcoming ceremonies and an eager search for mutually beneficial relations the Chinese statesmen have encountered during their trips to Italy, France, the EU Commission and the Balkans for an annual summit with Central and East European leaders.