share our values, like China, will write the rules of global economy.”22
The transition brought about by Trump
On January 20, 2017, Donald Trump assumed U.S. Presidency. As Donald Trump is different in his handling of international affairs compared with many former U.S. presidents, especially his predecessor Barack Obama, with regard to U.S. strategy and policies toward East Asia, a historical transition is in progress. The transition constitutes a new variable in the U.S.–China competition in East Asia.
Indo-Pacific strategy replacing rebalance
As rebalance failed to realize the goal, the Trump Administration gave it up in 2017.23 For balancing China, the cooperation of East Asian allies is essential but insufficient. The U.S. needs more help from the countries neighboring the region. Among them, India is a rising power and U.S.’s quasi-ally. In the U.S.–China competition in East Asia, U.S. hopes to win Indian support.
On October 18, 2017, U.S. Secretary of State Rex Tillerson addressed CSIS with a speech Defining Our Relationship with India for the Next Century.24 The strategic collaboration of U.S., India, Japan and Australia constitutes the foundation of the Indo-Pacific strategy.
On November 10, 2017, on attending the APEC Summit in Vietnam, U.S. President Donald Trump repeatedly addressed the Summit with the phrase “free and open Indo-Pacific.”25
On May 30, 2018, the U.S. Defense Secretary Jim Mattis announced that the Pacific Command has been renamed Indo-Pacific Command “in recognition of the increasing connectivity of the Indian and Pacific Ocean.”26
In general, as the strategy of rebalance was replaced, the continuous pressure for China to afford decreased. As a grand strategy toward the region, balancing China is also the strategic goal of the Indo-Pacific strategy. As the specific steps have not been formulated, the pressure on China has not come into play. Compared to the rebalance, the Indo-Pacific strategy is less competitive for China. It is made by the transition — the first difference from the past.
TPP withdrawal
On January 23, 2017, U.S. President Donald Trump withdrew U.S. from the TPP.27 The withdrawal reflected Trump’s antipathy to globalization. “Globalization has left millions of our workers with nothing but poverty and heartache.”28 He said “TPP is pushed by special interests who want to rape our country, just a continuing rape of our country.”29 Compared to the multilateral trading agreements like TPP, the Trump Administration showed more interest in bilateral agreement. “Bilateral deals are far more efficient, profitable and better for OUR workers.”30
The U.S. motive in TPP was to restrain China from the leadership over the regional economy. As TPP was given up, China is relieved from the ever-exclusive prospect. Although the Trump Administration is more interested in bilateral trading agreement, no specific progress has been realized. Compared to TPP, the preference of bilateral arrangement of the Trump Administration is also less competitive for China. This is the second difference.
Waging the trading war
U.S. trading deficit with regional countries is the Trump Administration’s major concern. Compared to former federal governments, the Administration’s solution is imposing tariff with high rate on foreign imports. Six countries are listed responsible for the deficit: China, Japan, Germany, Canada, Mexico and South Korea.31 Three of them are East Asian countries.
According to Table 3,32 U.S. trading deficit with the three has been fast growing in the last 10 years. In 2008, the deficit to China accounted for 33.29% of U.S. annual trading deficit; the total deficit with China, Japan and South Korea accounted for 44.03% of U.S. annual trading deficit. In 2017, the former became 48.78% and the latter 60.67%. For the Trump Administration, the harsh fact would be substantially ameliorated if the U.S. could efficiently cut its deficit with the three, especially China.
On June 15, 2018, U.S. President Trump announced plans for 25% tariffs on $50 billion worth of imports from China.33 On June 15, China proclaimed it would retaliate with the same strength.34 On July 6, 2018, the U.S.–China trading war broke out.35 U.S. and China mutually imposed 25% tariffs on $34 billion worth of imports received from each other. About 59% of the $34 billion in Chinese goods are produced by foreign-invested enterprises in China.36 It is the largest trading war in economic history. The U.S.–China competition has reached a new high.
Table 3. Ten years U.S. trade deficit with China, Japan, and South Korea (Monetary unit: US$ billion).
Source: https://countryreport.mofcom.gov.cn/record/index110209.asp?p_coun=%C3%C0%B9%FA, 2018/06/24.
The U.S.–China trading war would influence regional relations in three aspects. First, regional countries fall victim to the war. Thousands of transnational corporations from regional countries invest in China and export products to U.S. Their U.S. market shares would shrink.
Second, U.S. relations with East Asian countries are deteriorating. The Trump Administration is responsible for the loss of regional countries in the war. U.S. relations with regional countries are thus hurt. Consequently, this would put the U.S. at a disadvantage in future competition with China.
Third, regional countries in disputes gain the historical opportunity to improve their relations. Regional cooperation is necessary in confronting the consequence of the war. On May 9, 2018, the China–Japan–South Korea Trilateral Summit took place in Tokyo, Japan. It was the first reconvening of the summit since its interruption after November, 2015.37 Compared to the past, China would benefit from its latest improvement of relations with others, especially Japan, which is a U.S. ally.
Generally speaking, as the final result of the war remains unknown, so at least now and for China, the consequences of the trading wars are not all bad; for U.S. they are not all good. This is the third difference.
North Korea denuclearization
As North Korean missile and nuclear development have realized great achievements, the Trump Administration is determined to resolve issues with it. Trump is different from former Presidents in agreeing to hold a summit with the North Korean paramount leader.
In the General Election 2016, Donald Trump hoped that China could help to resolve the Korean Peninsular crisis.38 Since Trump became U.S. President in 2017, he gradually founded a working relation with Chinese President Xi Jinping with regard to Korean Peninsular affairs.39 With the collaboration of China, South Korea and Singapore, U.S. President Donald Trump and North Korean Leader Kim Jong-un held a historical summit in Singapore on June 12, 2018.40
Denuclearizing North Korea offers a historical chance for regional cooperation. For furthering the denuclearization, regional cooperation is still needed. Also, the ever-present tensions over the Korean Peninsula have decreased to some extent. This is the fourth difference.
Conclusions on the transition
Occurring since 2017, the transition of U.S. strategy and policies toward the region shows us that U.S.–China competition is still in progress.
Objectively
