Breaking Down the U.S.-China Trade Relationship: Consequences at Home and Abroad

Amy Celico, formerly Senior Director for China Affairs at the Office of the U.S. Trade Representative and currently the head of the Albright Stonebridge Group's China practice in Washington D.C., joined the World Affairs Council and moderator Nelson Dong for a conversation on the consequences of the U.S.-China trade dispute.

Since March 2018, the United States and China have slapped tariffs on each other's goods in a tit-for-tat dispute initiated by the Trump administration. As of now, Trump has imposed tariffs on over $250 billion worth of Chinese products and services, threatening to further levy another $267 billion on China's exports to the U.S. What began as a limited effort to change the trading relationship has escalated into a full-scale trade war. Celico illustrated the legitimate grievances that the U.S. has about China's market-distorting practices and how, unlike previous administrations, the Trump administration has sought punitive measures to gain concessions from the Chinese.

Celico shared her insights on how the Chinese interpret these disputes. She describes how Secretary of Treasury Steven Mnuchin's hard work in negotiating with Vice Premier Liu He—Xi Jinping's top economic advisor—was vetoed by President Trump himself. Much of China's diplomatic and economic consternation rests on their inability to identify a Trump administration official who can speak for the President. The Chinese are finding it harder to negotiate in good faith, Celico warned, as the U.S. continues to add tariffs to Chinese goods without a clear policy or goal in sight. She points out that Trump wants "something" from the Chinese, but what that "something" is has not been made clear.

Celico walked the audience through the cast of characters who fall in and out of favor with President Trump on trade policy and noted that in large part it is the President himself taking the lead. Celico explained the trade philosophies of administration officials such as Secretary of Treasury Steven Mnuchin, Secretary of Commerce Wilbur Ross, Director of the White House's Trade and Industrial Policy Peter Navarro, and current United States Trade Representative Robert Lighthizer. She addressed Secretary Mnuchin's worries about protecting Wall Street and the U.S. stock markets from the trade war, and Ambassador Lighthizer's protectionist bent towards securing free and open markets in China. She also explained President Trump's relationship with the American business community, who previously came out in favor of the now-defunct Trans-Pacific Partnership (TPP) and are now at odds with the White House's protectionism. The business community doesn't appear to have a clear inroad into the White House as the President seems to respond to feedback and secure his support only from those outside of Capitol Hill. Moreover, President Trump doesn't treat industries equally, whether it's devaluing the services sector or over-valuing the economic impact of heavy industry and manufacturing.

This talk also highlighted the need for American consistency in negotiating trade agreements and engaging in trade disputes. Without a clear objective, this escalating trade war with China will increasingly affect the cost of living for American consumers. For trade-dependent states like Washington, this conflict is even more alarming. Despite a pessimistic perspective on the current U.S.-China trade relationship, Celico encouraged the audience to stay engaged in these global conversations.

This program was in partnership with the Washington State China Relations Council (WSCRC) and Albright Stonebridge Group.