It is commonly perceived that US President Donald Trump is using trade leverage with China in order to pressure Beijing to get tougher on North Korea over the latter’s nuclear weapons program. But what if we run that in reverse? It could be argued that Trump is using the Korea crisis to pursue a trade war with China.
A trade war solely on economic terms would be politically and legally problematic for Trump. But not if it could be couched in resolving a global security problem with «rogue state» North Korea and its historic ally China.
It seems more than a coincidence that the US war of words with Communist North Korea should escalate at the same time that Trump is making moves to hit China with sanctions over alleged trade malpractices. This week, Trump ordered an investigation into allegations of Chinese theft of American intellectual property rights and, more widely, unfair trade policies which supposedly give China’s exports an advantage over US goods.
The trade investigation ordered by Trump could result in the imposition of steep tariffs on Chinese exports to the US. The US administration has already reportedly begun ratcheting up trade barriers on Chinese aluminum and steel products. If the Trump administration goes further in slapping on commercial sanctions, Beijing is warning that a full-blown trade war could erupt between the world’s two biggest economies.
China has also warned that there should be no linkage between the Korean security crisis and the trade disputes with the US. «North Korea and trade are different issues,» said China’s foreign ministry spokeswoman Hua Chunying. «Using one issue as a tool for exerting pressure on the other is clearly inappropriate.»
Trump, however, has repeatedly linked the two issues. He has openly remonstrated with Chinese President Xi Jinping «to do more» to rein in China’s North Korean ally over its development of nuclear weapons and ballistic missiles. And Trump has explicitly referred to America’s $500 billion annual bilateral trade with China as leverage on Beijing to take a tougher line on Pyongyang. China has rejected claims that it is not doing enough to restrain North Korea’s weapons program. It points to the recent UN Security Council vote earlier this month to hit Pyongyang with tighter economic sanctions, for which Beijing claims it will bear the biggest cost in terms of lost trade with its east Asian neighbor.
Following the latest round of new UN sanctions, the war of words between Washington and Pyongyang reached alarming levels last week. Trump threatened North Korean leader Kim Jung-un that his country would «face fire and fury the like of which the world has never seen» if it continued with missile tests banned by the UN. North Korea hit back saying that it was drawing up a plan to fire four mid-range ballistic missiles near the US territory on the Pacific island of Guam, where 7,000 American military forces are based.
Even US media and politicians were perturbed by what they saw as Trump speaking recklessly off the cuff. Fears of all-out war breaking out reverberated across the US, the Asian region and the world. China and Russia urged for calm diplomacy. Over the weekend, President Xi entreated Trump in a phone call to prioritize peaceful diplomacy with North Korea.
Also over last weekend, no less than five senior Trump administration officials sought to tamp down anxieties that the world was moving towards a nuclear war. CIA director Mike Pompeo and National Security Adviser HR McMaster both insisted in US media interviews that war was not imminent. Also, in a visit to American ally South Korea, General Joseph Dunford, the Chairman of the US Joint Chiefs of Staff, assured South Korean President Moon Jae-in that diplomacy, not war, was Washington’s priority in dealing with North Korea.
Then in a coauthored op-ed in the Wall Street Journal, Secretary of State Rex Tillerson and Defense Secretary James Mattis wrote that Washington was not seeking regime change in North Korea. Rather, they said, US was engaged in a «peaceful pressure campaign» for denuclearization of the Korean Peninsula.
While all the senior US figures publicly said they supported Trump’s use of harsh rhetoric towards North Korea, their coordinated intervention on the subject suggests a strenuous effort by Washington to dial down the war of words that Trump had unleashed.
So, was Trump simply being a reckless blowhard over North Korea, or is there something else going on?
Perhaps Washington really does not want a war with North Korea at this juncture given the political repercussions. The impact of such a conflagration would be catastrophic. The population of North Korea is about 25 million. Would Trump’s vow of «fire and fury» be prepared to inflict such devastation? The capital of South Korea, Seoul, has alone a population of 25 million, located near the Demilitarized Zone with North Korea. If the latter were to open up its extensive artillery batteries, let alone fire a nuclear missile, the death toll would be colossal. Politically, the US would not be able to sustain such horrific responsibility.
That brings us to the question of why Trump appears to be stoking the crisis with North Korea, if war is not the objective.
Associated Press reported over the weekend that «despite the bluster in public» the Trump administration «has been quietly engaged in backchannel diplomatic communications with North Korea over the last several months». Officially, the two countries do not have diplomatic ties, but they have over the decades since the Korean War (1950-53) used the UN mission in New York as a secret contact point. AP reported that the Obama administration had negligible communications with the North Koreans, but that «the contacts quickly restarted after Trump’s inauguration».
This raises the suspicion that Trump’s testosterone-charged sparring with Kim Jung-un is a show. Sure, it is a reckless show, given that a miscalculation or stray word could be misconstrued and lead to a military attack, precipitating a wider war involving a catastrophic nuclear exchange. But if the Trump administration has been holding backchannel communications with Pyongyang, as the AP report indicates, then what is the sudden blow-up in antagonistic rhetoric really about?
Trump’s transactional worldview is notorious. He sees everything through the lens of bottomline profit and being a «business winner».
The tycoon-turned-politician probably cares little about whether North Korea has nuclear weapons or not. After all, during his election campaign last year, Trump raised eyebrows when he suggested that Japan and South Korea should acquire their own nuclear arsenal in order to save America money.
What bothers Trump more than anything else is the crippling US trade deficit with China. Last year, the US-China trade imbalance stood at $350 billion in Beijing’s favor, according to the US Census Bureau. For comparison, the US had a deficit with the entire European Union of nearly $150 billion. The US economy has been in the red with the rest of the world since at least the late 1980s, when offshoring American jobs by US corporations became fashionable. The US total trade arrears – importing more than it exports – is around $740 billion, according to official figures. That is a measure of a very sick and poor American economy, which Trump has staked all his supposed business prowess on rectifying.
Blaming the deep, chronic structural problems of American capitalism on China’s «unfair trading» is a politically expedient rallying call for nationalist politicians like Trump. During his election campaign, Trump railed against China for «raping American workers». But the fact is that it is speculative capitalists like Trump who have got rich by offshoring American jobs to cheap-labor places like China over the past 30 years.
President Trump simply can’t overhaul the chronic trade deficit that the US has with China and the rest of the world. Because it is a structural problem inextricably rooted in the moribund state of American capitalism.
Politically, Trump can’t start a trade war with China – or anyone else like Germany and the EU – over mere economic issues. A gratuitous trade war would make Washington run afoul legally with the World Trade Organization. Unilateral American trade sanctions against rival economies looks like a «sore loser» not a «winner».
This is where the Korean crisis seems to be play into Trump’s economic game plan with China. By whipping up that crisis over alleged nuclear security concerns, Trump is trying to put China on the defensive over appearing to not do enough to rein in North Korea. By undermining China as a sponsor of «rogue state» North Korea, the Trump White House seems to be using that as moral authority for sanctioning China’s economy.
Those sanctions would otherwise be seen as American bullying, but if such moves are couched in rhetoric of «punishment» for not doing enough to secure the world against «North Korea’s nuclear madness» then the Trump administration can claim that it is acting «benevolently» on behalf of world security.
Bottom line for Trump is: Stoke North Korea crisis in order to sanction China’s economy – for the purpose of bailing out a failed American economy.
And, in doing so, Trump’s attitude seems to be «never mind the collateral damage of a possible nuclear war». Such is the risk-taking of a wheeler-dealer capitalist like Trump.