This time, the “get tough on China” talk could be more than empty rhetoric — and leaders in Beijing may even recognize some of the tactics Donald Trump plans to use against them.
The president-elect is showing a willingness to try to shape U.S. trade with China in ways that are politically more direct than previous administrations have been willing to discuss. On Sunday, he threatened — again — to use steep, blanket tariffs to stem imports into the United States.
He has repeatedly declared that exports should be a priority for U.S.-based companies, and has promised a tax structure that will help make them happen.
His willingness to wield political influence over business matters isn’t limited to trade. Over the last week, Trump has shown he isn’t afraid to lean directly on U.S. companies that aren’t behaving as he wants. On Tuesday morning, he used Twitter to pressure Boeing to charge less for a new Air Force One . On Friday, he promised “retribution” against firms that fire employees or build factories overseas.
“I was in Beijing a week ago, and at one point I said to an audience of government officials, it’s going to be very interesting for you to work with an American leader who admires a lot of what you guys do,” said Ian Bremmer, a closely watched political scientist and founder of consulting firm Eurasia Group. When the officials showed surprise at Bremmer’s mark, he explained what he meant: “When you say, ‘Jump’ to a company, they ask, ‘How high?’ Trump would love that.”
Representatives from the Trump transition team did not immediately respond to emails from CNBC requesting comment.
Neither Bremmer nor anyone else expects the U.S. economy to start mimicking China, where 20 to 25 percent of GDP comes from state-controlled companies whose primary purpose isn’t even to make profits but to advance Beijing’s political goals such as maintaining employment.
But “we’re entering an era where I wouldn’t be surprised to see the U.S. government being less shy about applying state power to achieve what it sees as the national interest,” said John Minnich, senior Asia-Pacific analyst at consulting firm Stratfor.
The dynamic between the two countries is changing. For decades, Democrats and Republicans alike have said that the best way to encourage a more open China was for the U.S. to just keep trading with the country and drawing it into the global economy. The hope was that eventually, China’s tremendous market would become as open to U.S. companies and investment as the U.S. is to Chinese imports and investment.
But that hasn’t been happening, especially over the last few years.