13 Apr 2018

Trump’s TPP Reversal: Part of Washington’s China Strategy?

It has been a bizarre couple of weeks for U.S. watchers and avid supporters of the global trade order.

First, news of the United States-China trade war has pervaded public discourse about the state of relations between the two great powers with analyses revolving around the lose-lose nature of tit-for-tat tariffs that contravene global principles of international trade.

Second, it was revealed that the Trump administration is looking at the possibility of re-joining the Trans-Pacific Partnership (TPP), after the TPP's 11 other member states agreed to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) without the United States.

What could these seemingly disparate developments waging a trade war with the second largest economy in the world, yet purport to re-engage Pacific states in another trade deal actually signify?

The Trump administration's China strategy

Both developments appear to be part of a larger, consistent strategy that Washington has developed vis--vis China. An analysis of key actions and statements by the Trump administration suggests a high degree of coherence in Washington's China strategy despite what some anti-Trump analysts might claim. Three pieces of evidence justify this assertion.

First, in the 15 months since Trump's inauguration, the administration has released key strategy documents regarding its foreign and defence policy, including the National Security Strategy, National Defence Strategy and Nuclear Posture Review.

A recurring theme in these documents is the remarkably consistent portrayal of China as a revisionist power, determined to re-create a global order antithetical to U.S. values and interests and seeking to displace the United States in the Indo-Pacific.

Additionally, the U.S. caricatures Chinese investments in developing states as predatory economics designed to expand Beijing's influence, while emphasizing its unfair trade and intellectual property practices that damage U.S. interests. It also highlights China's ongoing military and nuclear modernization, explicitly labeling China along with Russia, North Korea and Iran as a contemporary threat to U.S. national security.

These statements reflect an increasingly realist and zero-sum view of the global order, suggesting an approach of containment instead of managing China's rise to great power status. This is a distinct difference from the strategy taken by past administrations, including that of Obama.

Significance of the Trade War & Re-convening of the Quadrilateral

Second, the administration has attempted to put its strategy into practice. At least two events stand out the first being trade tariffs on steel and aluminium, and the recent tariffs targeted at Beijing, in a bid to address perceived unfair trade practices.

The second significant event is the re-convening of the Quadrilateral an informal grouping comprising the U.S., Japan, India and Australia and the ramping up of trilateral meetings among Quad members. Among other things, Quad countries discussed the creation of a free and open Indo-Pacific, the need to uphold the rules-based order, and the freedom of navigation and overflight. While there were no direct references to Beijing, the points of discussion allude to the country the Quad was most concerned about.

While it remains early days yet for the grouping, the reboot of the Quad 10 years after its birth hints at the construction of a network of like-minded, democratic states that could aid Washington in a containment strategy that perpetuates its influence in the region. The U.S. has also openly invited India and Japan to participate in a yet-to-be-concretized regional lending mechanism that provides an alternative to China on infrastructure investment and financing.

A Grand Strategy Aimed at Containing China

Third, besides publishing its strategy toward China and finding potential allies through the Quad, Washington has sought to articulate what it means by a Free and Open Indo-Pacific Strategy (FOIPS).

According to the State Department's Bureau of East Asian and Pacific Affairs, FOIPS involves ensuring that Indo-Pacific states are free from coercion, with access to open sea lines of communication and airways, open infrastructure development, open investment and open trade.

Again, these policy thrusts echo the strategy documents the Trump administration has put out, and signals sent through trade tariffs and revival of the Quad. Importantly, a renewed interest in joining the TPP also suggests a realization by the administration that economic integration through trade must accompany other forms of Indo-Pacific cooperation, including the expressed U.S. willingness to provide an alternative, more transparent investment mechanism.

To be sure, many elements of this China strategy have not been fleshed out in detail with some parts downright unclear. For instance, how may the Quad function to balance Beijing's rising influence, and what could a U.S.-led new investment outfit look like?

Nonetheless, there is no doubt that there exists a grand strategy aimed at containing China to retain U.S. hegemony in the Indo-Pacific with the recent trade-related announcements being further proof of that. This point should be recognised and taken with the fact that the Obama administration also took time to operationalize its pivot' and subsequent rebalance' to Asia.

What could this mean for Indo-Pacific states?

The Trump administration's hawkish stance on China should worry Indo-Pacific states, especially those loathe to take sides in this power re-alignment.

Indeed, moves such as reciprocal tariffs would hurt states other than the U.S. and China especially trade-dependent countries in Southeast and Northeast Asia. The states involved in the TPP should also rightly be sceptical about the renewed U.S. interest, lest the whole trade agreement is misconstrued as a tool toward the containment of China.

Besides economics, the concern is whether Washington's muscle-flexing through its China strategy could result in a head-on confrontation. While the possibility of U.S.-China conflict cannot be dismissed especially in the Taiwan Strait or due to miscalculations by either side military confrontation by design is highly unlikely. The costs of conflict between two great powers with nuclear weapons are astronomical, and both sides would be wary of escalating tensions to the brink of hostilities.

Washington's China strategy counters what it views as a threat to its dominance in the region. It also represents the next phase in the search for a modus vivendi that both powers find acceptable. In the meantime, before such middle ground is found, Indo-Pacific states should brace for impact and strive to reduce collateral damage to themselves.

After all, to cite Thucydides, the strong do what they can and the weak suffer what they must as great power competition heats up, the region is likely to get increasingly uncomfortable for smaller, price-taker' states caught in the cross-fire.

Jansen Tham is a 2nd year Masters in Public Policy (MPP) student at the Lee Kuan Yew School of Public Policy, National University of Singapore.