Trump raises stakes on China

President Donald Trump has plenty to discuss when he finally meets his Chinese opposite, says Matthew Partridge.


Tillerson and Xi: plenty to discuss
(Image credit: Copyright (c) 2017 Rex Features. No use without permission.)

During a trip to Asia, American Secretary of State Rex Tillerson claimed that his boss is eager to meet China's president, Xi Jinping, next month, reports Neil Connor in The Daily Telegraph. There will certainly be plenty to discuss. Barely two months into his tenure, Trump has "caused concern" due to his comments about "Taiwan, North Korea, trade, and China's increasing military assertiveness" in the South China Sea.

"The future of our world heavily depends on relations between America and China," says Martin Wolf in the Financial Times. However, diplomacy between two countries has been made "particularly challenging" by the election of the "populist" Trump. "The very last thing our fragile world economy needs is a trade war between the US and China."

Still, Trump may have a point when he accuses the Chinese of protectionism, says Keith Bradsher in The New York Times. Thanks to high Chinese tariffs, "a Jeep Wrangler can cost $30,000 more in China than in the United States". Indeed, "less than 5% of cars in the country are imported, compared with one-quarter in the United States". This has encouraged American, European and Japanese carmakers to build "huge assembly factories in China with the help of local partners, contributing to China's rise as the world's largest automaker".

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As far as the North Korea imbroglio is concerned, Trump's stance may be making things worse. He "appears set on raising the stakes in a power contest nobody can win", says Simon Tisdall in The Guardian. While other administrations "have previously threatened Kim with force", Tillerson has now stated that "the US might strike first rather than in retaliation". Such bluster, combined with criticism of China's policy towards North Korea, makes "it politically difficult for Xi to give the US the cooperation it wants".

On the contrary, "China has largely itself to blame" if the US now pursues a more militaristic agenda towards North Korea, says Mitchell Blatt in the American magazine The National Interest. Beijing has spent years "turning a blind eye to sanctions violators and keeping the dangerous North Korean regime alive and its leaders well fed", so it is not surprising that Washington now thinks "enough is enough". China has also reneged on promises to limit imports of North Korean coal. Overall, "if China wants to avoid instability, then China must take an active role and take responsibility".

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri