The Chinese New Year’s holiday, approaching this weekend, is traditionally a time of gift-giving and celebration in the Middle Kingdom. This year, no one is likely to be celebrating more than President Xi Jinping.
On Monday, Xi’s U.S. counterpart signed an order withdrawing American support for the Trans-Pacific Partnership. The move fulfilled one of President Donald Trump’s central campaign pledges. Since the 12-nation free trade pact was a Washington initiative, and other signatories made concessions largely in expectation of access to the huge U.S. market, his signature all but issued the deal’s death warrant. Trump touted the move as a “great thing for the American worker.” In fact, it’s a great thing for the Chinese economy and government. One of the few things that seemed clear about Trump’s foreign policy was that he wanted to get tougher on China – to limit its geopolitical ambitions and end its allegedly unfair trade practices. He’s just made both tasks much harder.
Regardless of Trump’s constant vilification, the TPP was a key part of the U.S. strategy to contain and influence a rising China. Trump and his appointees have talked instead of imposing “peace through strength” in Asia – threatening to rethink the “one-China” policy, block China from accessing its artificial islands in the South China Sea and build up U.S. naval forces in the region. All any of this is likely to do is embolden Chinese hardliners and raise the costs to the U.S. of maintaining its preeminence in the region.
It’s also likely to cost the U.S. some of its allies. A successful TPP would have bound important economies around the Pacific Rim, from Japan to Vietnam to Chile, more closely to the U.S., while solidifying America’s presence in the most vibrant and vital part of the global economy.
Asian nations now have every reason to question U.S. commitment and staying power, not to mention the promises of its leaders. Several will focus their energies on China’s own free trade pact for the region, which will increase rather than decrease their dependence on the Chinese economy. If Trump asks for their backing to roll back Chinese expansionism, they’re unlikely to answer the call. By contrast, a successful TPP would have put pressure on China – which isn’t a signatory to the pact – to respond. In theory, to compete, it would have had to open its markets further to foreign companies and begin abiding by rules of trade and business written in Washington. (Indeed, at least some reformers in China privately welcomed the deal as a means of encouraging liberalization at home.) Trump’s threats of tariffs are unlikely to accomplish the same goal. And if nothing else, why would a supposedly sly negotiator voluntarily give up one of his most powerful points of leverage? Even if Trump genuinely hated the TPP, he could have maintained an air of uncertainty about his intentions (this, at least, he seems to excel at). Instead he has shown his hand before any real bargaining with China has begun. So much for the art of the deal.