Welcome to the 234th edition of Trade War.
On the cusp of the historic US election, a look at how Trump and Harris differ on economic policy toward China. While the former president has a “fundamentally transactional mindset,” Harris wants to stand up to China while cooperating in areas that benefit the US. And a former national security advisor suggests using the “China Card” again.
AstraZeneca China chief is under investigation. The CEO of the embattled Anglo-Swedish pharma giant heads to China. And the number of billionaires in China has fallen by a third in the last three years, according to a report on the country’s richest tycoons.
Investors have started monitoring the number of protests and other signs of economic stress in China to better gauge when Beijing might opt to shift policy course. And a new report shows impressive strides in meeting the “Made in China 2025” advanced technology goals.
Notable/In depth
Hukou reforms grow as cities vie for people amid falling fertility rates and the property slump
China’s support of Maduro shows hollowness of noninterference rhetoric
Xi turns to older male advisors who focus on national security over the economy
Trump vs. Harris on China - both bad for Xi
With the U.S. about to choose a new president, a big question looms: is Washington’s economic policy-making approach to Beijing about to shift again?
While there are some big commonalities between the two candidates—both aim to promote American jobs and investment, and see China as a threat to America’s continued economic preeminence—there are also meaningful differences.
Donald Trump has repeatedly expressed his fondness for tariffs, and the bigger the better. For China imports, taxes could rise to as high as 60 percent, the former president has said.
Vice President Kamala Harris, by contrast, has emphasized that her policy will be “not about decoupling, [but] about de-risking,” and has called for the U.S. to be a “a leader in terms of the rules of the road,“ an approach favored by top Biden administration officials, including Commerce Secretary Gina Raimondo and Treasury Secretary Janet Yellen.
Harris has repeatedly criticized Trump’s plan for higher tariffs, saying it would be equivalent to putting a $3,900 sales tax on Americans and would fan inflation.
“At the end of the day, it seems that the candidates' perspective on economic policy will be: Harris focused on domestic industrial policy and diplomacy through unity with U.S. economic partners, and Trump pursuing a protectionist and mercantilist policy, which he has promoted as reminiscent of U.S. tariff policies of the 19th and early 20th centuries,” writes Treasury & Risk.
“From a Chinese perspective, the China policies of a new Trump administration and a Harris administration will likely be strategically consistent,” say Peking University experts Wang Jisi, Hu Ran, and Zhao Jianwei, in a Foreign Affairs article published in early August.
That’s not good news for China nor its top leader: “For Xi, neither Donald Trump or Vice President Kamala Harris are welcome options. On trade, technology, and most importantly for China—Taiwan—the candidates pose unappealing scenarios,” writes Bloomberg Opinion columnist Karishma Vaswani.
Trump on China: “a fundamentally transactional mindset”
“[Trump] mainly views U.S.-China relations through the lens of trade, and he seems committed to accelerating economic decoupling between Washington and Beijing,” says an International Crisis Group report on the next administration leaders’ likely China policies.
“Secondly, his first administration and his campaign statements underscore a fundamentally transactional mindset, whereby he subordinates most other objectives—strengthening U.S. alliances and partnerships in Asia and improving human rights conditions inside China, for example—to that of creating what he sees as a more balanced economic relationship with Beijing,”
“Thirdly, there is a level of unpredictability at work, not only because the former president has staked out contradictory positions over time—whether on his relationship with Xi or his feelings about the social media platform TikTok.”
Harris: “standing up” to China, while also working together
Harris, by contrast, believes that “even as the U.S. calls out China for what it perceives as violations of the norms and laws that Washington says should anchor the international order, the world’s two foremost powers should pursue opportunities to cooperate,” writes the Crisis Group.
“Harris distilled her thinking about China perhaps most succinctly in her remarks at the 2024 Munich Security Conference, explaining that Washington is ‘standing up to Beijing when necessary and also working together when it serves our interest’.”
Playing the “China Card” again?
“The United States is contending with the most challenging international environment it has faced since at least the Cold War and perhaps since World War II.
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