Skip to content

Trump’s Team Has Mixed Views on Economy, Business, and Trade

Since December 2016, American President-elect Donald Trump has been announcing nominations and appointments for his cabinet and federal trade and business positions, a group with a variety of opinions – some positive, some very negative – on China, and China-US economic, business, and trade relations in particular.

It should be noted that opposition to China is an almost cyclical affair in American politics, with the strongest opposition – at least historically – occurring during election campaigns and the first year in office, followed by a gradual softening among previous hardliners and a greater focus on achievable ends in the China-US relationship. President Obama entered office promising labour unions that he would strictly tackle trade laws with China, while George W. Bush campaigned by calling China a competitor; both would later take softer, more engaging approaches.

Iowa Governor Terry Branstad has been nominated as the US ambassador to China, a move which was positively received by China’s Foreign Ministry. Chinese officials, including President Xi Jinping, have had a long, positive relationship with Branstad, and Iowa itself exports large quantities of agricultural products to China. Trump’s choice for ambassador to China has been a proponent of free trade, which may offer chances for China-US relations to adopt a more conciliatory tone. Branstad was not a major donor to Trump’s campaign, but did voice his support for the then-candidate.

In contrast, China reacted negatively to the appointment of Peter Navarro, economics professor at the University of California at Irvine, to head the White House National Trade Council, with a Global Times editorial attacking the appointment. The countries’ relationship could conceivably be threatened by Navarro, who points to China’s trade practices as one of the world’s biggest issues and says that “Trump will impose countervailing tariffs not just on China, but on any American trade partner that cheats.” “Death by China: Confronting the Dragon,” a book, and later film criticizing China’s trade practices, was written by Navarro and published in 2011, while his “The Coming China Wars” came out in 2006, and he has written on “China’s militarism,” outlining how he believes “maintaining Taiwan as an independent, pro-US ally is absolutely critical for strategically balancing against the rise of an increasingly militaristic China.” Navarro further believes that economic growth is hampered by imports, with the American trade deficit with China as the key problem.

On Navarro, the Global Times has warned that he “may raise risk of Sino-US conflict” and that his appointment is evidence that “the Trump team maintains a hard-line attitude toward China.” The China Society of WTO Studies says that “China is preparing itself” and “China will respond.” Zhun Ning of Tsinghua University said that “Chinese officials had hoped that, as a businessman, Trump would be open to negotiating deals.” For Trump, “Death by China” “depicts our problem with China.” Deborah Elms of the Asia Trade Institute says that “The Chinese are now frantically reading everything Navarro’s written,” although Kenneth Jarrett of the American Chamber of Commerce in Shanghai notes that “Navarro’s views may soften over the time as he faces the challenge of actually dealing with China.” Patrick Chovanec of Silvercrest Asset Management Group sums it up with “All you have to do is watch his movie or read his book. China is the nemesis.”

A nominee more favourable towards China-US ties may be private equity billionaire Wilbur Ross, Trump’s nominee to head the Commerce Department. Tough China trade policy will be in large part enacted by Ross, but the evolution of his views on China makes it difficult to anticipate his actions in office. He has compared American industrial policy to Chinese five-year plans, and in 2012 stated that “China-bashing is wildly overdone” and “if something were to happen that cost China jobs, like if they upwardly revalued the currency a lot, those jobs aren’t going to come back to the U.S.” However, his stance has appeared to have hardened against China in recent months, with Ross and Navarro writing a paper claiming that “in a world of freely floating currencies, the U.S. dollar would weaken and the Chinese yuan would strengthen because the U.S. runs a large trade deficit with China and the rest of the world” and “when auto companies like GM or Ford build new factories in China or Mexico rather than in Michigan or Ohio, additional jobs are also lost throughout the economy.”

On Ross, art collector Larry Warsh has said that Ross’ history of “cultural exchange sets an amazing foundation for economic exchange. That’s something important to have when you’re dealing with China,” and John Thorton of Goldman Sachs claims that “he will be a positive influence on the U.S.-China relationship.” The New York Times points out that “for all the anti-China commentary, Mr. Ross has been a frequent visitor in the past two decades.”

Strong views against China in trade policy may be one reason for Trump picking former deputy US Trade Representative Robert Lighthizer to be the US trade representative, as Lighthizer has in the past recommended an “aggressive approach in dealing with China” and has said free trade “helps China become a superpower.” Further he has questioned “how does allowing China to constantly rig trade in its favor advance the core conservative goal of making markets more efficient?” and said that the “claim made in support of PNTR [Permanent Normal Trade Relations with China] that it would bring significant economic benefits to U.S. workers and businesses – was simply wrong” as “the current trend within China is away from further liberalization.”

On Lighthizer, a colleague has said that he will likely “use every tool available to create leverage to get China and anyone else to stop the cheating,” while Usha Haley of West Virginia University said the appointment indicates a “hard-line stance on Chinese trade.” The New York Times portrayed his selection as a “sign that Mr. Trump intends to fulfill his campaign promise to get tough with China.”

Finally, Wall Street attorney Jay Clayton, who worked on history’s largest initial public offering, by Chinese internet giant Alibaba, has been nominated to be chair of the Securities and Exchange Commission, while the former chairman and chief executive officer of Exxon Mobile Corp., Rex Tillerson, is Trump’s pick for Secretary of state, and has significant investments in China.

Need an account? Sign up