China’s Ministry of Commerce: Flowers in Front; Big Sticks in the Back

On Jan. 3, the Trump transition team announced the nomination of Robert Lighthizer as U.S. trade representative. Lighthizer is 69 years old and served as the deputy U.S. trade representative during the Reagan administration in the 1980s. He used to accuse China of “unfair trade practices” and is said to share the same views as Peter Navarro who was nominated last month as the head of White House National Trade Council. Navarro is the author of books, including “Death by China,” which contain radical views.

With Wilbur Ross having been nominated as secretary of commerce, Trump’s team for trade and commerce seem to have pulled up an “iron curtain” of protectionism. Sharing Trump’s views, Trump’s trade and commerce team have a strong tendency toward anti-globalization, and their understanding of fairness and justice in trade severely contradicts the values of the World Trade Organization. It seems that they are unlikely to further contribute to the current world trade order. Instead, they are more interested in overturning it.

This Trump team seems to sneer at the principles of win-win and multi-win in trade and commerce. Rather, they believe in the principle of “America First.” In order to apply this principle, it is possible that they are going to put on a show of “power politics” backed by America’s strengths, such as its economy.

The Trump team seems to have no doubt that the cause of America’s economic problems is not internal but external in that America has been the victim of international trade rules. However, because international trade rules are set by powers led by America, this belief is absurd no matter what angle one looks at it from. Now the American trade and commerce policymakers are people with eyes fixed on external causes, and Trump looks just like a squad leader; low ranking but having a lot of problems with everything in this world.* Therefore, it seems highly likely that such a team will hijack the international trade system and ask for ransom from America’s long-time trade partners.

Anyway, America has always been the big boss of all forms of international order and has benefited the most from them for a long time. If America becomes the first to overturn the existing order and really starts to behave like a short-sighted owner of small coal mines grabbing whatever short-term profits are available at the expense of long-term development, then I’m afraid our world order will gradually slide into a full collapse.**

Wherever we are, the rebels are usually the masses. But today, America, “the boss,” wants to be the first one to dump the system and to return the international community to an ancient state of chaos. This really leaves the international community incredulous, unable to raise their eyeglasses before they dropped, as the Chinese will say. The appointments to the Trump team and their claims have repeatedly sent shock waves to the American society and the outside world, prompting Paul Krugman to write an article in The New York Times with the chilling title “America Becomes a Stan,” triggering a new wave of imagination.

Trump has now and again forgotten his place when making comments through his Twitter account, prematurely marginalizing Obama. On the positive side, however, he has given China time to prepare its response strategies. The entire Chinese society has completed what can be called a psychological adjustment to facing a new American government that is going to be very tough on China. If, after Trump takes office, trade wars break out between China and the U.S., or worse, if tension rises in the relationship between the two countries, this will not come as a surprise to any Chinese people.

In addition to getting ready to face sharp trade conflicts between China and the U.S., the Chinese people have studied and discussed the scenario in which Trump may play the card of easing the U.S.-Russia relationship. The other two possible Trump cards are Taiwan and the South China Sea. But none of these can be the winning card with which America plays the game however it wants. These cards have mostly been thought out, even tested and tried, by previous American presidents. Trump’s only invention is to produce extraordinary effects by using his Twitter account while waiting to take office, although it must be pointed out that the Twitter effects are largely bubbles. Trump has absolutely no additional resources with which he can guarantee that he will become the gambling guru who can inject magic into this game of cards.

We will see what kind of a leader Trump will turn out to be only after Jan. 20. From the evidence so far, his confidence is soaring through the roof. Among the people he has appointed, most have the habit of talking big and in extreme terms. Judging from the pattern of politics, it will be extremely difficult for Trump to achieve outstanding performance in governing America in a short amount of time, as it requires almost a miracle. And he has a much better chance of making serious mistakes and therefore ending up on the losing side.

The entire Trump team’s dissatisfaction with China team may be huge, but their combined confidence in gaining real benefits for America through trade wars with China will not amount to much. At the front gates of China’s Ministry of Commerce there may be flowers, but behind those gates there are big sticks as well, quietly waiting for the American government.

*Editor’s note: A “squad leader” refers to the lowest rank in the Chinese army, and this figure often appears in Chinese jokes, the image sometimes being positive and sometimes negative. It is likely used here sarcastically despite the fact that the U.S. president is probably the most powerful leader in the world.

**Editor’s note: The expression, “a short-sighted owner of small coal mines,” comes from a phenomenon in China where private owners set up poorly-equipped and hazardous small coal mines in violation of government regulations for short-term financial gains.