The Chinese may finally be getting inside Donald Trump’s head. Perhaps it’s the listening they’ve allegedly been doing on his most private thoughts as he reportedly unburdens himself on his unsecured cell phones to his besties, like Fox’s Sean Hannity. Leaders in China denied The New York Times scoop, but noted that if the U.S. president is worried about eavesdropping, he should use a Chinese-made Huawei. Well played, Beijing.
If Chinese agents really are listening in, there’s no end of places where they could make use of that insight in what is fast becoming a serious battle between the world’s two largest economies.
To begin with, there are the next face-to-face meeting between Trump and China’s President Xi Jinping on the sidelines of the G20 conference at the end of November in Argentina. And the Chinese, no novices when it comes to reading American electoral politics, will no doubt be watching next Tuesday’s midterms carefully for any hint of vulnerability.
On Thursday, Trump tweeted that he and Xi had spoken over the phone, and that "discussions are moving along nicely." With tariffs already beginning to bite on both sides of the Pacific, particularly in stock exchanges in the U.S. and China, Thursday’s conversation suggests that there may be some dawning sense of just how profound the stakes are in a whole host of areas concerning the two countries.
So far, though, beyond a brief and encouraging Trump tweet, there’s been little indication that China is prepared to offer any substantial relief for the laundry-list of concessions the Trump administration has presented to them. According to Bloomberg, Trump has asked officials to start drafting a potential agreement, but not everyone is buying it. Rob Carnell, ING's chief economist and head of research for Asia Pacific, told CNBC that the timing of the whole thing "feels a little bit too coincidental" given the election mere days away.
Notably, The list of Chinese goods under tariffs jumped from $50 billion to $200 billion in September and it could surge from 10 percent to 25 percent next year. Larry Kudlow, the president’s top economic advisor, observed that Beijing still isn’t returning any phone calls from the American side — “Nothing. Nada.”
And why should they? China’s trade agenda is deeply linked to any number of other pressure points, many of which Trump himself has established, often with little apparent understanding of the consequences.
Early on, long before the threats of a full-blown tariff war turned into a reality, Trump sought Chinese aid in pressing North Korea into concessions on its race toward a nuclear arsenal.
On the surface, a Chinese-U.S. agreement dealing with North Korea would appear to be mutually beneficial. China has little interest in having a nuclear power led by a potentially unstable young autocrat close to some of its major population centers. And China is hardly interested in having an economically crippled nation of more than 25 million people — all potential refugees from famine and repression — on the other side of an 880-mile frontier.
Initially, China did pitch in, albeit half-heartedly, by enforcing sanctions imposed by the U.N. and supported by the United States. But lately China has begun easing off on these sanctions. Even taking North Korea out of the equation, China is well aware of the global leverage it holds.
The South China Sea is the transit corridor for at least a quarter of all the world’s trade — some several trillions of dollars worth — and the lifeblood of a host of countries. The corridor accounts for 14 percent of all American trade, some 30 percent of India’s trade passes through these routes, 43 percent of Japan’s, 23 percent of Brazil’s and even 12 percent of Britain’s commerce. Nearly two-thirds of China's commerce passes through routes that encompass the South China Sea.
Not surprisingly, Chinas considers this body of water strategically important and as integral a part of its security as the Chinese mainland. So, it has begun to fortify it as if it owns it. Building artificial, highly fortified islands, its military jealously defends all land and air approaches. U.S. military aircraft, even accompanied by Japanese air defense forces that approach are warned off, in no uncertain terms.
Even taking North Korea out of the equation, China is well aware of the global leverage it holds.
And in what feels like an effort to further isolate the United States from its traditional friends and allies in the region, China embarked in October on some major naval exercises with 10 nations that border the South China Sea, keeping the U.S. at bay.
Equally intractable is the perpetual issue of Taiwan. China continues to play hardball with any nation that seems prepared to recognize or do business with Taiwan independently of the mainland, which it considers a province of the mainland. In October, Australia abandoned plans for a free-trade agreement with Taiwan after Beijing warned of serious consequences.
Since the election of Taiwan’s new president Tsai Ing-wen, five countries have withdrawn diplomatic recognition of the island, though Trump and Vice President Mike Pence have both continued to insist on America’s embrace of Taiwan as a democratic counterweight to Chinese communism.
With further trade sanctions hanging over China’s head, it’s hard to see what leverage on any of these often deeply interrelated issues remains for Trump.
All of which brings us back to the upcoming G20 session. Despite what Trump claims, it's hard to believe that Xi actually sees Trump as a close friend anymore. Will the Chinese manage to glean any real insight from the president’s phone calls — if indeed they are tapped into his private communications?
Perhaps Xi himself may be perceptive enough to recognize how he can use this most recent scandal to embarrass Trump, and impress upon him that there is no easy road through Beijing. What is more clear is that whether working to resolve an increasingly nasty trade dispute or an intractable nuclear standoff with Pyongyang, America — and Trump — is quickly losing the upper hand.