China’s top economic adviser arrived in Washington this week in an attempt to defuse rapidly escalating tensions with the United States as the prospect…
China’s top economic adviser arrived in Washington this week in an attempt to defuse rapidly escalating tensions with the United States as the prospect of a trade war between the world’s two largest economies looms.
But Liu He, the American-educated technocrat who is now President Xi Jinping’s top economic adviser, may face an insurmountable task. The Trump administration appears less predisposed to engage with China than perhaps any other White House in decades – a dramatic turn given the United States’ long campaign to persuade China to open its markets to American products and investment.
President Trump and his top trade advisers share a widespread view that China cannot be trusted to negotiate in good faith and believe that past administrations spent fruitless years pushing the Chinese to make minor changes to their economy that arrived too late, and were too often reversed.
News that Mr. Xi has moved to abolish term limits for himself and his vice president has only increased suspicion in recent weeks that China has no intention of shifting toward a more market-oriented economic model and plans to have a state-dominated economy.
The lack of engagement is a worrying sign for relations, given that the Trump administration is now poised to deliver what could be the harshest economic sanctions on China in decades. In the coming weeks, the administration will decide whether to impose stiff tariffs on Chinese steel and aluminum and restrict investments to penalize China for its alleged theft of American intellectual property.
Economists fear trade sanctions could prompt retaliation from China, and even tip the world’s two largest economies into a trade war that would harm businesses and consumers in the United States and abroad.
“Certainly, the United States has gotten China’s attention with these threats,” said Susan Shirk, a former diplomat and the chairwoman of the 21st Century China Center at the School of Global Policy and Strategy at the University of California, San Diego.
