The US president is likely to pursue deals with China and North Korea which the Democrats are likely to back.
Much like the rest of the world, Asian countries carefully watched the US midterm elections, anxious about how its outcome would affect US foreign policy. Although the Democrats taking the House of Representatives prompted much speculation about a congressional gridlock, this is unlikely to influence the policy direction President Donald Trump has pursued on Asia.
In fact, so far one of the few foreign policy issues that the Democratic and Republican parties have agreed on have been ones concerning Asia. Trade deal with China
In the past, Democratic Party leader Nancy Pelosi, who is likely to be elected House speaker, and President Trump have had major disagreements but the few policies they have agreed on have included a tougher stance on trade with China.
In this sense, the House is unlikely to be a major source of opposition to Trump’s trade policies and, in fact, might end up supporting them.
In the second half of his first term, the president is also likely to seek a trade deal with China, something he alluded to in his November 7 press conference.
What might be included in a trade deal? When it comes to intellectual property theft, China’s past commitments to reduce intellectual property theft, via numerous bilateral agreements with the United States that pre-date Trump’s fame as a reality television star, failed to adequately address the problem. Thus Chinese offers to improve enforcement efforts against counterfeits and copies are unlikely to impress the US.
A face-saving solution for both sides would be for China to eliminate forced technology transfers to Chinese companies. This would allow Trump to safeguard the latest US-owned technologies while Chinese President Xi Jinping would get to declare that China’s own capabilities make these transfers unnecessary.
In his address to China International Import Expo delivered the day before to the US midterms, Xi emphasised measures to expand market access for foreign companies and the need to import goods and services worth $30 trillion and $10 trillion, respectively, over the next 15 years. If China is willing to commit to such market access opening measures and goods purchases from US companies in a bilateral agreement, then this would likely satisfy Trump.
In return, China would ask the US to reduce or eliminate the tariffs already imposed, and not impose tariffs on the balance of goods exported to the US, as the US president has threatened to do. Trump is likely to reserve the right to re-impose stringent trade remedies if China fails to fulfil its commitments. This formula would allow him to declare a significant victory for US exporters and workers across a range of industries, while claiming that the tariff strategy was a success.
If a trade deal along these lines is made, it is almost certain that Democrats will criticise it, even if it expands Chinese market access for US companies and increases China’s purchase of US agricultural products and other goods.
