U.S.-China relations are deteriorating. Despite President Donald Trump’s latest assurances that a trade deal is near, the trade war shows few signs of abating. U.S. imports from China have fallen, and vice versa. In the U.S., farmers and consumers are hurting, while in China investment and growth are slumping:
Meanwhile, the U.S. has opened a new front in the dispute by blacklisting a number of Chinese artificial-intelligence companies. Although the stated reason for the move is that those companies are involved in oppressive government surveillance, some suspect that it’s also aimed at throttling Chinese competition in the strategically important AI industry.
Beyond the trade war, political issues are damaging relations even further. Concern is mounting over China’s mass internment of the Muslim Uighur people in the western province of Xinjiang. The Hong Kong pro-democracy protests have generated international sympathy for the beleaguered city. A pro-Hong Kong tweet by Houston Rockets General Manager Daryl Morey generated widespread rage in China, while the National Basketball Association’s stumbling apologies lead to scorn in the U.S. The incident has brought American companies’ appeasement of Chinese censorship to the fore, threatening to force businesses to choose between an angry U.S. consumer base and a rapid-growing, highly nationalistic Chinese market.
So as the U.S. presidential election nears, the issue of China is looming ever larger. The next president won’t be able to escape the rapidly multiplying sources of friction with the world’s largest country. And the outcome of the election will have an enormous impact on the direction of the bilateral relationship.
From China’s point of view, a victory by former Vice President Joe Biden would almost certainly be the best outcome. Biden comes from the Clinton/Obama faction of the Democratic Party that has usually viewed free trade and cooperation with China as preferable to competition and confrontation. Biden has explicitly dismissed the threat of Chinese competition, laughing at the notion that “China is going to eat our lunch.” And he has been an outspoken critic of Trump’s trade war with China.
A Biden victory probably would result in a substantial reversal and repudiation of Trump’s tariffs. Chinese investors would once again be confident that U.S. consumers would snap up their products, inducing them to invest more, and lifting the Chinese economy. Meanwhile, U.S. consumers would benefit from the drop in prices as Chinese imports became cheaper again. And U.S. manufacturers who source parts and materials from China would be able to breathe a sigh of relief.
But things wouldn’t necessarily revert to the pre-Trump status quo. Having been burned by the whims of presidential animus once, Chinese manufacturers could be reluctant to make long-term investments in business lines aimed at the U.S. market. And Chinese consumers of agricultural products, forced to find new sources during the Trump era, would probably be reluctant to pay the additional costs of switching right back to U.S. suppliers. So both the Chinese growth slowdown and the pain of U.S. farmers might persist even under Biden.
Senator Bernie Sanders, meanwhile, would be a very different kind of president. Sanders is concerned first and foremost with the fate of the U.S. working class, and he is well aware of how workers have suffered because of Chinese competition. In May, Sanders criticized Biden for his laissez-faire attitude toward China, declaring:
Since the China trade deal I voted against, America has lost over 3 million manufacturing jobs. It’s wrong to pretend that China isn’t one of our major economic competitors. When we are in the White House, we will win that competition.
It’s very likely, therefore, that Sanders would sustain Trump’s trade war in some form. Its rhetorical tone, however, would change. Sanders has expressed admiration for the Chinese government’s successes in reducing poverty, and dismissed the notion that China represents an existential threat. His distrust of the military and security services could make Sanders less willing to view trade through a strategic lens; instead, he would likely focus mainly on labor competition. That would mean little relief for U.S. consumers, manufacturers and farmers, but it could ease the pressure on China’s technology industry.
The election of Senator Elizabeth Warren, however, would probably be the worst outcome from the perspective of China’s government. Warren calls her approach to trade “economic patriotism,” and it involves support not only for U.S. workers but for American exporters. Her skepticism of free trade’s impact on U.S. workers rivals that of Sanders, but her plans also involve major investments in science, technology and infrastructure aimed at preserving the competitiveness of U.S. industry. Those policies would be much more effective than tariffs in giving hard-charging Chinese exporters a run for their money in international markets.
Warren’s fiery rhetoric about China’s human rights abuses also far exceeds Trump’s. And she’s more comfortable with the military and the security services than Sanders. A Warren presidency would thus likely lead to more political conflict with China, as well as continuation of policies to weaken Chinese technology companies affiliated with that country’s military. Warren would also likely take a dim view of U.S. corporate acquiescence to Chinese censorship practices.
For U.S. consumers, a Warren presidency could mean more pain, since export subsidies tend to raise domestic prices. Farmers would probably see further erosion in the Chinese market. But U.S. manufacturers and technology industries would receive a boost from Warren’s supportive policies.
The 2020 election, therefore, looks like a crucial turning point in U.S.-China relations, with several very different futures on offer.