Did Xi Just Outmaneuver Trump?

In his phone call with Xi, Trump stated he agreed “to honor our ‘one China’ policy.” During the transition before his inauguration, Trump conducted an unprecedented phone call with Taiwan President Tsai Ing-wen, and created uncertainty about whether his administration would continue with the “one China” policy, which has served as the foundation of U.S.-China relations. In an interview with Fox, he said “I don’t know why we have to be bound by a ‘one China’ policy unless we make a deal with China having to do with other things.”

The initial response to the call has been to declare Xi the “winner” and Trump the “loser,” based on Trump’s reversal. The New York Times declared that Trump’s move “gives China an upper hand.” Yet diplomacy is not a boxing match. The rush to keep score is premature for several reasons.

First, Trump only referred to the policy. In all the available readouts of the call, no mention exists of Trump repeating the components of the one China policy, which include the three communiqués (1972, 1979, 1982), the 1979 Taiwan Relations Act, and the 1982 “six assurances” given to Taiwan. Although a helpful affirmation of the foundation of U.S.-China relations, Trump’s general reference to the one China policy left him room to interpret it broadly.

Second, with Tsai’s election as Taiwan’s President, Beijing has pressed her to affirm the “1992 consensus” about one China. Her reluctance to do so means Beijing is growing ever more suspicious of her intentions regarding independence. In this context, if Trump decides to significantly alter U.S. relations with Taiwan, even if he does so while remaining under the umbrella of a one China policy, tensions in U.S.-China relations will likely increase significantly.

Third, talk is cheap. Trump is an unconventional president, with a transactional orientation and impulse. He may change his mind, or offer a new interpretation. China will also push to cement his pledge in the call in other meetings and joint statements between U.S. and Chinese officials. Trump may decide to push back.

Finally, beyond the call, how will the two sides address the key issues in the region and the relationship that require their engagement? In addition to Taiwan, these include the DPRK’s nuclear program, maritime claims in the South China Sea, and bilateral trade, to name a few. The call was a positive development, but the key question is whether Xi and Trump can work together. Keeping score of “winners” and “losers,” and who has the upper hand, misses the bigger picture altogether.

The phrase bandied around after Trump’s Thursday night phone call with Chinese Communist Party Secretary Xi Jinping is “paper tiger.” James Zimmerman, the former head of the American Chamber of Commerce in China, told Reuters that Trump’s threatening to repudiate the one China policy and then backing down “confirmed to the world that he is a paper tiger . . . someone that seems threatening but is wholly ineffectual and unable to stomach a challenge.” The international affairs expert Shi Yanhong told The New York Times, “Trump lost his first fight with Xi and he will be looked at as a paper tiger,” while The Guardian headlined a piece about the call, “China U-turn is latest sign Trump may turn out to be a paper tiger.” (Mainland Chinese media has, generally speaking, taken a gracious—one might even say victorious—attitude towards the phone call.)

To be fair, Trump may have exerted concessions from Xi—on North Korea, for example, or Iran, or the South China Sea—that have not yet been made public. Perhaps those will leak in the coming weeks, and Trump may regain a bit of standing in the China-watching community. But for now, it seems that in his first standoff with Xi, Trump capitulated. Trump’s meeting this weekend with Japanese Prime Minister Shinzo Abe—who needs the United States to reassure, ideally both publicly and privately, it’s commitment to defending Japan—should provide a balm to the U.S. president’s ego.

Strategically, this capitulation hurts America’s ability to nudge China to enact and enforce policies more beneficial to U.S. interests.

What do the call, and the capitulation, mean for American business interests in China and Japan? It’s generally positive for both, but for different reasons. For China, the Trump-Xi phone call seemed to end a tense period in bilateral relations, upset by Trump’s early December phone call with the Taiwanese president. For now, U.S. businesses have less reason to worry about retaliatory taxes, for example, or harsher enforcement of some of the Chinese laws that both American and Chinese business regularly skirt. But Trump’s capitulation should disappoint companies expecting Trump to strongly defend their interests in China.

Unlike Xi, Abe has shown himself to be the needier partner in his relationship with Trump. Expect some juicy trade agreements, very possibly involving American or Japanese tech firms—something that Trump elicited from Abe in exchange for a renewed public or private commitment by the U.S. to its security alliance with Japan. To Abe, Trump is not a paper tiger. Or at least, Trump very much needs to believe that he isn’t.

China’s protracted, strategic shrug may be paying off.

Following Trump’s now-famous December 2 call with Tsai Ing-wen, it would not have been terribly surprising had Beijing mouthpieces like The People’s Daily ridiculed Trump, inveighed against American overreach, and issued dark warnings about the growing possibility of conflict. Instead, Chinese authorities remained strategically restrained in their public pronouncements on Trump and his stated willingness to revisit the one China policy they cherish. (Not so for some state-controlled outlets; but they do not speak for Beijing.) In doing so, they avoided offending the thin-skinned U.S. president or boxing him into a political corner.

By biding its time, Beijing may have afforded more breathing room to voices close to Trump rooting for some degree of U.S.-China cooperation. After all, Trump’s inner circles lean more Sinophilic than his campaign rhetoric, as the fiery pronouncements of advisor Peter Navarro suggest. Jared Kushner, with a broad if amorphous portfolio, has business interests linked to Chinese insurance megafirm Anbang, and has reportedly been in closed-door talks with Ambassador Cui Tiankai; Ivanka Trump, Kushner’s wife and Trump’s daughter and confidant, knows her way around Chinese social media and has seen to it her daughter learn Mandarin. Commerce Secretary nominee Wilbur Ross has admired Chinese culture for years, and is a veteran deal-maker there; so too is Philip Bilden, a former Hong Kong hedge fund magnate recently nominated for Secretary of the Navy.

Trump’s billionaire-studded team may thus have calculated he can have his moon cake and eat it too, much like previous presidential candidates who made de rigeur threats of “getting tough” on China and then embraced a surprisingly resilient bipartisan status quo once they assumed office. Trump, seemingly stuck in permanent campaign mode, may be able to pound the podium and issue the occasional broadside at Beijing with little consequence, so long as Zhongnanhai receives the requisite back-room assurances that all is fundamentally normal.

China-watchers initially aghast at the U.S. president’s disregard for the one China policy may now be feeling whiplash, and Trump skeptics are likely to see it as a massive loss of U.S. face, an indictment of a fickle White House, or both. But it’s not yet clear, perhaps to anybody, to what degree Trump plans to honor the one-China understanding. Recent history shows Trump’s statements carry little or no binding precedential value; he may still push for a big deal in exchange for a full embrace of the policy. For their part, most Americans are unlikely to care whether or not Trump earlier nodded in the direction of an abstract (and objectively confusing) diplomatic principle.

In other words, U.S.-China relations remain in the Schroedinger’s cat-like state they assumed shortly after Donald Trump won the U.S. election. His words and actions often inhabit distinct realities; observers cannot assume that he means what he says, or will hold himself to it in the future. Beijing was smart not to panic in early December. It would be equally naive to breathe a sigh of relief now.

President Trump’s call to President Xi in which he finally articulated the long-held U.S. position of the “one China policy” certainly is a welcome first step to stabilize the foundation of U.S.-China relations. Once he has reassured China that he doesn’t intend to trash the relationship and wants to work together on common problems like the North Korean nuclear threat and climate change then we can move on to negotiate for fairer and more reciprocal treatment in trade and investment and in access for NGOs, journalists, and academics, as the recent report of a task force I co-chaired recommends.

Trump’s reversal of his earlier off-the-cuff remarks suggesting that we use the “one China” policy and our relations with Taiwan as a bargaining chip on other issues is also a hopeful sign that on important issues he ultimately will listen to his Cabinet officers like Secretary of State Tillerson, even if he remains very stubborn about acknowledging mistakes or correcting himself.

But Trump’s unnecessarily provocative statements about the one China policy and Taiwan and his delay in correcting them predictably led to a public kowtow as the Chinese made clear that Xi would only talk with Trump if he reaffirmed the one China policy. It put the U.S. in the humiliating position of appearing to succumb to Chinese demands instead of doing the right thing from the beginning. As a result, Xi looks like a hero to the Chinese public, and America’s stature is seriously diminished. This damaging pattern is likely to be repeated as other global leaders force Trump to eat his ill-considered and intemperate words.

There’s a reason diplomacy is stodgy and boring and conducted in back rooms: because it gives all players options. The trouble with public diplomacy is it sets parameters and ends up narrowing the parties’ range of maneuver. Unlike President Trump’s self-vaunted real-estate negotiations, in diplomacy all parties are accountable, first and foremost, to their domestic audiences. And domestically, the perception of what is a good outcome may be entirely different from the diplomats’ actual desired outcome. In business there is a reason why a party goes to the negotiating table: to buy, sell, or prevent a take-over. Parties understand clearly what the ideal outcome is. In diplomacy, parties are often brought to the negotiating table unwillingly, or they can simply choose not to show up.

Trump fancies himself the ultimate negotiator. He promised to bring his acumen to the world stage and has now disturbed a beehive, causing plenty of headaches to U.S. policymakers and global leaders and arguably limiting diplomatic options for the US. Just as he tried to do with Mexico, boasting that he would make it pay for a wall it did not need or want, Trump sought to “pre-condition” (in the words of Secretary of Commerce nominee Wilbur Ross) its negotiating counterparts by aiming high. In the case of China, he said everything was up for negotiation, including the sacrosanct one-China policy. And just as the Mexican President was forced to cancel a meeting with Trump after political backlash at home, so did President Xi seek to distance himself from Trump for fear of appearing weak to his domestic audience regarding the one-China policy.

It bears repeating: every international political leader has a domestic audience that is his or her priority. Contrary to what Trump could imagine, foreign leaders may choose to ignore him if by talking to him they risk appearing weak to a domestic audience. Even among foreign leaders, there are differences in the leeway they have dealing with an ” imperial” power. Leaders of countries with a historic sense of imperial oppression or victimization, such as China, Mexico, Vietnam and the Philippines, among others, have to be particularly sensitive to nationalist sentiment in the face of a perceived foreign insult. For a politician like Theresa May, inviting Trump for a state visit can result in a petition against it or perhaps an uncomfortable Prime Minister’s Question Time. But for the leader of a country with a longstanding grievance about mistreatment by a stronger power, a slight from Trump could lead to massive protests and the threat of widespread social unrest. Such a leader would sooner snub Trump than risk upheaval at home. This is why Enrique Peña Nieto cancelled his scheduled visit to Washington, and why Xi preferred to stall, waiting for Trump to reach out and then conditioning the conversation to support for the One-China Policy.

This was unfortunate for the United States because it squandered the opportunity to engage with China assertively. The way to push back on China is not by humiliating it, not by painting it into a corner, and certainly not by bringing up the one thing no Chinese leader can agree even to consider negotiating: the integrity of the one-China policy. Instead of pre-conditioning the Chinese with his blustery tweets, Trump put them in the impossible position of not being able to come to the table, even to talk on the telephone, without appearing weak. This broke all communication at the highest levels and put all other cooperation on stand-by. I cannot see a case in which the United States wins diplomatically by not talking to its counterparts. The basis of diplomacy is communication, and if countries are not communicating they are hardly advancing their agendas and objectives. The biggest loser, in this case, is the country whose calls go unreturned: the United States.

Fortunately, Trump appears to have moves other than doubling down. The world’s largest and second-largest economies are back on speaking terms and we are all better off for that. To get there, President Trump had to tone down his bluster, walk back his comments regarding the One-China policy and behave, even if for a few moments, as a responsible statesman. The Chinese learned that Trump blinks; they took his measure and came out ahead. With hope he will not seek to regain his lost ground by proving his strength in other ways. The case for pushback was there, but Trump’s negotiating style gave it all away just to get the Chinese on the phone. I applaud his correction. I hope he learns and applies the lessons to other regions of the world. In diplomacy, you accomplish very little by bluster, and a lot by being boring and discreet. Here’s hoping for more boring relations between the United States and the world.

Donald Trump’s call to Xi Jinping has been portrayed as an embarrassing backdown after his early bluster on the topic of ‘One China” and a phone conversation in December with Taiwan’s Tsai Ing-wen. I think such a judgement is premature.

It is true that Trump’s initial statements on “one China” looked half-cocked. To disavow such a policy would mark a momentous about turn for Washington and require detailed strategic planning ahead of time. None of that seemed to form part of Trump’s calculation at the time. He was far from his inauguration, let alone having a Cabinet and many members of his national security team in place to implement his decision.

Nonetheless, Trump’s early behavior has rattled Beijing and put it off-balance. As much as they disliked Barack Obama, the Chinese may now be yearning for his cool predictability. Trump’s willingness to embrace Shinzo Abe, the prime minister of country which the president has been criticizing since the 80s, will unsettle Beijing further.

It may be that Beijing will be able to see Trump off. But that is not clear at the moment. All the signs point to Trump and his team preparing for a tough fight with China on trade, market access and economic policy. At a time when the Chinese economy is slowing and accumulating debt, the Communist Party will not welcome such a fight.

Whether Trump has the smarts and the temperament to see such a fight through, and keep corporate America and the community on side, is an open question. But don’t write him off yet.

In the meantime, acknowledging the “one-China” principle is the right thing to do. That allows Trump to work on areas where he may be able to make genuine inroads.

It is inappropriate and even irresponsible—for Chinese observers at least—to use the ‘paper tiger’ analogy on President Trump to describe his pledge to honor traditional U.S. government position on ‘One China’. A ‘true tiger’ would not budge, so to speak, and push the level of tension to a higher plain. Is that what would better serve China’s interests and those of the U.S. and others?

Whatever Mr. Trump said on the ‘One China’ issue, before his inauguration, did not constitute U.S. government policy; he was still a private citizen. His tweeting messages, in reaction to comments from official Chinese sources, were not of a policy nature, either, as such wording was not meant as nor could it constitute a formal message to communicate to the Chinese government.

As such, President Trump’s position in his telephone call with President Xi on February 9 was the only policymaking behavior on an issue that has attracted much speculation in both American and Chinese societies and beyond. Words that summarize the phone conversation, posted on the White House homepage, are policy.

What we have gone through since the congratulatory call Trump took from Ms. Tsai in Taiwan is a brain-storming process on the part of the Trump team. Similar processes have taken place at virtually each juncture of transition in U.S. presidential leadership since Washington subscribed to Beijing’s formula of ‘One China’ in January 1979. It is just that with the advent of modern means of mass communication, on top of Mr. Trump’s personal habits of relating to the general public, those of us outside the circles of formal diplomacy start to feel ourselves to be live-fed about U.S. foreign policy deliberations and its exchanges with China.   

Still, using analogies such as ‘paper tiger’ for Mr. Trump in this particular incident are irresponsible because they work to endorse an erroneous sentiment, which is similar to beating the drum to drive a confused man into getting into a fist fight with another, just to prove what onlookers define as manhood.

Keeping in mind China’s interest in a stable bilateral relationship with the United States, it is, as a matter of fact, a common sense requirement to respect American leaders as they are. Chinese commentators on world affairs must respect American leaders in the same manner as they respect their own leaders. In both countries leaders and their principle advisors are just as human as we ourselves are.    

So much as we call on diplomats and politicians to conduct responsible policymaking, we observers of diplomacy in action have a duty to talk in responsible ways as well. 

Trump out-maneuvered himself. His initial approach with the telephone call with Tsai and  the ‘everything’s up for negotiation, including One China,’ had all the hallmarks of headstrong position-taking from ignorance without thinking it through. In the past week Rex Tillerson, Jim Mattis and Gary Cohn have staged a carefully calibrated damage limitation exercise to put that right—presumably while Steve Bannon and Peter Navarro were out of the room. Xi had simply to sit tight in line with his new ‘I am the responsible actor’ stance. So victory was his with the White House wording handing him the dominant role. If Trump got meaningful concessions in return, we have not been told about them as yet.

If the Abe meetings are meant to be a counter-punch, one can only say ‘good luck.’ China will react badly . The question is the extent to which Washington is concerned. The prospects of a long-range trade war are high and what each side is preparing for. That could hit the yuan through the trade surplus. It would hit U.S. companies operating or assembling in China as well as mid-West farmers.

But China must feel it is in a good place right now after the call,  APEC and the Davos fawning on Xi, and looking at the line of entrants to AIIB. Duterte’s switch, Vietnam’s agreement to ‘manage’ differences and deals with Malaysia mean it no longer has to rely on Cambodia to veto ASEAN criticism. Southeast Asia is tilting its way big time while, under Trump, the U.S. is rapidly losing the plot. The danger is that the PRC will become too confident and DJT may lash out.