Skip to main content
China's President Xi Jinping looks on during a meeting with Laos' Prime Minister Thongloun Sisoulith (not seen) at the Great Hall of the People in Beijing, China, December 1, 2016. REUTERS/ Nicolas Asouri/Pool - RTSU5K1
Up Front

Trump’s misguided brinkmanship on China

Donald Trump reportedly told the Wall Street Journal that “Everything is under negotiation [with China] including One China.” What Trump likely seeks in this negotiation are changes in China’s economic policies, including currency. But three things are wrong with his approach and the brinksmanship that animates it.

Author

First of all, it is based on a caricature of Chinese economic policy and U.S.-China economics relations, rather than on sound analysis. The low value of China’s currency against the U.S. Dollar today is the result of market forces, not government intervention, as was the case a decade ago. Competition from China did cause some “job loss” in America, but technological change (e.g. robots) is the main reason.

Second, when we talk about “One China” we are really talking about Taiwan. All the evidence strongly indicates that the people of Taiwan have absolutely no desire to be bargaining chip in a high-stakes negotiation between Donald Trump and Chinese president Xi Jinping. Before Trump goes down that road, he owes it to Taiwanese leaders to consult with them to verify whether they wish to be used in this way (my prediction: they will say no).

Third, the assumption of Trump’s brinksmanship is that the Chinese side is bluffing and will back down if the United States takes a tough line. But what if that assumption is wrong? On some issues, of course, China does bluff. But on Taiwan, there are reasons it will hold firm. Taiwan has a special place in how Chinese (not just the government) think about their country. The government regards the One China Policy as the keystone in the U.S.-China relationship. For them, removing the keystone leads the whole edifice to crumble. Finally, based on what we know of Xi Jinping’s personality, he doesn’t bluff.

Get daily updates from Brookings