For China, Trump realises trade and security do mix

The news media have been quick to note United States President Donald Trump’s embrace of bombing in Syria and the need for the North Atlantic Treaty Organization (Nato) as reversals of the foreign policy he advocated on the stump.

But he has made another flip in the past week that is just as consequential, and possibly more important for his future foreign policy. By asking China to “solve the North Korean problem” in exchange for an improved trade deal, Mr Trump has embraced linkage.

Broadly, linkage is the idea that economic policy and geopolitical strategy can be used in tandem, with trade-offs between the two realms. This idea was not on Mr Trump’s radar before the election, especially not with respect to China.

Candidate Trump famously took a hard line on China and trade, while simultaneously signalling that he did not much care about China’s geostrategic expansion and conflict with other Pacific powers, including the US.

Now that he is President, Mr Trump is realising that he cannot soft-pedal global security to the extent his rhetoric suggested he might. That explains his turn towards Nato, which he trashed on the campaign trail.

The generals around Mr Trump are probably subtly emphasising this point. After all, these are men whose whole careers have been devoted to the goal of global security. The concern about North Korea — and the implicit subordination of economic interest to security — has the whiff of the generals’ preoccupations.

The Syria episode also carried lessons related to North Korea. The first, learnt before the US bombing, was that dictators such as Syrian President Bashar Assad will take advantage of what they perceive as weakness, with little concern for the consequences to Mr Trump.

The US President surely understood that the deployment of chemical weapons had something to do with his administration’s message that the US no longer sought Mr Assad’s ouster.

In that sense, Mr Assad’s use of chemical weapons was a slap in Mr Trump’s face — and that is surely part of his rapid swing from indifference to retaliation.

Then, after the bombing, Mr Trump also learnt that foreign policy hawks from both the Democratic and Republican parties will support him if he takes bold action against a notorious bad actor.

The generals will not have let it escape Mr Trump’s notice that North Korea has been unusually aggressive in testing and firing missiles since his election. Part of this is that Mr Kim Jong-un just wants to be noticed by the new administration. But part of this is also that he and his advisers are trying to see how much they can get away with during the tenure of a president who ran on a platform of disengaging from the defence of US allies in the Pacific.

Unlike Syria, Mr Trump cannot just bomb North Korea — not without the risk of provoking retaliation on South Korea. Even a conventional North Korean attack on Seoul could kill hundreds of thousands in that densely populated city. A nuclear attack could do much worse.

That has led Mr Trump to look for leverage against North Korea. And that, in turn, has led him to China.

Mr Trump cannot credibly threaten China militarily. And that is why, presumably, he is trying to bribe China instead.

The only obvious way to bribe China is by offering something China might want and that Mr Trump has threatened not to provide, namely, a good trade deal. Voila, linkage.

This form of linkage is unlikely to work this time, however, for at least two reasons.

One is that China’s ability to “solve” North Korea is limited. Yes, China has huge influence through economic ties and subsidies. But China also needs North Korea as a buffer between itself and US ally South Korea — and North Korea knows that.

The consequence is that there is no easy way to rein in the Kim regime without toppling it. And that is an outcome China really does not want.

The US similarly has less leverage than one might think over its dependent allies. That is something Mr Trump will discover in the Middle East, assuming he tries to press Israel to make real concessions to the Palestinians.

The other reason linkage will likely not work for North Korea is that Mr Trump has not credibly given China enough incentive. A “better” trade deal is only a meaningful prize compared with some baseline.

Yet it is far from clear that there will even be a trade deal with China, and the absence of such a deal does not pose a serious problem for China unless the US starts putting tariffs on Chinese products.

Any such tariffs — for example, an anti-dumping tariff on steel — are going to be challenged by China before the World Trade Organization.

The long delays of such a challenge will be costly to China, to be sure. But China has almost certainly already figured the risks and costs of such a tariff into its pricing strategy.

What is more, Mr Trump’s own actions have already removed some of the US’ bargaining power.

At one time, the Americans might have tempted China with the offer of membership in a regional trade deal, like the Trans-Pacific Partnership, which intentionally excluded the Chinese. But Mr Trump killed the TPP in his first week in office.

But none of this is as important as the fact that, on the job, Mr Trump is thinking in terms of linking economics and geopolitics. That is good news. There is no way to manage the extraordinarily complex US-China relationship without considering both sides of the equation — and their influences on each other.

Winston Churchill is often credited with the line that the US always does the right thing once it has exhausted all the alternatives. Maybe, very slowly, Mr Trump’s foreign policy thinking is starting to develop in the right direction. BLOOMBERG

ABOUT THE AUTHOR:

Noah Feldman is a professor of constitutional and international law at Harvard University and was a clerk to United States Supreme Court Justice David Souter. His seven books include “The Three Lives of James Madison: Genius, Partisan, President” and “Cool War: The Future of Global Competition.”