Giving Credit Where Credit (Might Be) Due

Last week, it was reported that, after months of considering the issue, President Trump was preparing to initiate a Section 301 investigation into accusation of Chinese violations of US intellectual property rights. Getting “tough on trade” and renegotiating all of the US’s “unfair” trade deals were some of the clearest policy promises of the Trump candidacy, and it seemed that the president was making ready to deliver on his promises. Interestingly, the issue was, perhaps, one where the president might have actually been able to deliver a “win” of sorts, as getting tough with China was one of the few issues on which Democrats see eye to eye with the president. An event to announce the investigation was scheduled for Friday, August 4.

The event was, however, cancelled and the White House has not provided any information as to when it might be rescheduled or even if the administration plans on opening the investigation at all. What could explain this delay of an issue that plays both to Trump’s base and offers the promise of Democratic cooperation?

Over the week, the United Nations Security Council imposed what are being called “the toughest sanctions ever” on North Korea in response to its repeated nuclear and ballistic missile tests. Under the new sanctions, “all exports of North Korean coal, iron, iron ore, lead, lead ore and seafood will be prohibited. The resolution also imposes new restrictions on North Korea’s Foreign Trade Bank and bans the country from increasing the number of workers it sends abroad.” The sanctions threaten to undermine a third of the country’s sorely needed export revenue, and has produced a flurry of desperate responses from North Korea.

If the sanctions are to have any effect on North Korea’s nuclear and missile programs, China will have to be willing to enforce them. While China had already (reportedly) stopped buying North Korean coal in accordance with an earlier UN-imposed sanctions regime, Chinese trade with North Korea has been rising lately, largely due to Chinese imports of “iron ore, zinc and other minerals…as well as growing amounts of seafood and garments manufactured in the North’s well-equipped textile factories.” Note that the list of Chinese imports matches almost item for item the list of banned North Korean exports. China was, as a veto-holding member of the Security Council, obviously deeply involved in negotiating the sanctions regime and was willing to allow its own interests to be directly targeted. Furthermore, China issued a blunt and direct warning to North Korea, urging North Korea to “not violate the U.N.’s decision or provoke the international society’s good will by conducting missile launching or nuclear tests” (the obligatory chidings–“we would like to urge other parties like the United States and South Korea to stop increasing tensions”–to the US were tacked on as an afterthought).

The timing of these two events–the delay of the Section 301 investigation that could have started a trade war between the US and China and the imposition of significant sanctions on North Korea–could easily be coincidental. And yet, we must consider the possibility that as the sanctions were being negotiated, Trump raised the possibility of the trade investigation–and offered to “delay” it–as a threat/inducement for China to agree to the sanctions.

It’s far too early to be able to say whether this is a plausible account; there very well could be other reasons for the delay of the Section 301 investigation, which could be announced any day. China also has plenty of reasons to try to prevent North Korea from developing significant nuclear and ballistic missile capabilities.

But, given the way that Trump conducts business and politics, there’s a good chance that we’ve finally seen some of his self-vaunted “deal making.” It’s already clear that Trump has no strong policy commitments: While he very well might believe that the US “loses” at trade (he certainly doesn’t seem to understand how trade works), he has no real commitment to improving the lives of the voting base that helped elect him. Given the personal stake he invested in preventing North Korea from proliferating and the likely influence of Mattis, McMaster, and Kelly–all of whom understand the threat posed by a nuclear and ballistic missile-armed North Korea–I have no doubts Trump would be willing to trade off the uncertain future of a trade fight with China for the imposition of a significant and punishing sanctions regime on North Korea. Whether China will be willing to enforce the sanctions remains to be seen, but the persistent threat of a trade war might be enough to convince China to stay on board. The US economic relationship with China is essential to the regime’s economic prospects and political stability, particularly as China’s economic rise begins to slow.

While Trump’s wins have been few and far between, it’s important to give credit where credit might be due. If I’m right, this was a smart and savvy use of protectionist trade bluster to ensure a more important foreign policy objective. That’s a win in anyone’s book.

 

 

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