US-China trade talks: the five mistakes Trump’s team keeps making

Trump needs to learn some manners, resist the attempt to crow at concessions and stay in the background so negotiators can work behind closed doors
Crucially, the US should focus on market access and forced technology transfer instead of tariffs, and gather like-minded allies to approach China multilaterally

Ken Wilcox

Published: 3:00am, 19 Oct 2019

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So China and the Donald Trump administration came out of last Friday’s talks with a “deal”. That is obviously good for the markets in the short term, but in the longer term nothing has been accomplished that is worth crowing about. Trump is like a man recovering from a self-inflicted gunshot wound and thinks he has scored a victory. The major issues, from the US point of view – market access and forced technology transfer – remain unchanged.

Why? Because the Trump team makes the same five mistakes, over and over again.

First, he focuses on the wrong things. He should be concentrating on eliminating forced technology transfer and expanding market access. Instead, Trump seems to be focused on tariffs, which any good economist knows are a waste of time and energy. Tariffs hurt both parties, and accomplish nothing other than aggravating both governments’ major constituencies.

Second, as I discovered in my own efforts to set up the first joint venture between an American commercial bank and a Chinese one in the second decade of this millennium, Chinese negotiators are generally polite to each other. Even when they have the most difficult messages to deliver, in most cases, they do so politely.

Trump is overtly confrontational and often gratuitously insulting. In my experience, rudeness generates a desire to get even that can last for years.

Third, Trump assumes the foreground. This approach handcuffs the negotiators and results in Trump’s mistakes appearing larger than life. In China, the leader stays in the background and lets the negotiators do their work. When we were negotiating our joint-venture bank, we followed this time-honoured procedure.

It afforded me an opportunity to change course without losing face, But if I had been in the foreground, course correction would have been difficult at best, and perhaps impossible.

Fourth, Trump fails to give President Xi Jinping face. His challenges are always very public. And, when the Chinese side appears to be giving in, he beats his chest and declares victory.

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By doing so, he forces China to backtrack. Negotiations should be handled behind closed doors. If you gain concessions, you should respond by praising your opponent. Giving face in public mitigates the probability of your opponent backtracking.

Fifth, Trump seems to scorn the idea of having friends. He lashes out at everyone, friend and foe alike, and refuses to entertain multilateral agreements. Yet, in the field of international relations, we have been most successful, historically, when we have targeted multilateral arrangements.

So, what would I recommend? Trump should find ways to praise China in public. To be sure, he occasionally praises, but in an inconsistent manner. One day he compliments Xi, the next he describes him as the enemy. There are plenty of good things to say about China, a country which has lifted over half a billion people out of poverty in only a few decades.

In short, he should give Xi more face. Trump should lead from behind, empowering his negotiators, and to the extent possible, he should remain invisible, so as to give himself maximum flexibility and his negotiators maximum latitude, and to maintain his dignity.

Most importantly, he should focus on increasing market access and eliminating forced technology transfer. Those are the only things that China could grant that would actually be of benefit to the US. And he should exercise his leverage, politely but firmly and consistently.

Chinese companies have so much more latitude to operate in the US than American companies have in China. He could insist on reciprocity. And to the extent that it is not granted, he could deny it to China as well.

Finally, Trump would have a greater chance of success if he worked together with other like-minded countries.

Former president Teddy Roosevelt recommended that in diplomacy, it was best to “speak softly and carry a big stick”. Trump needs a bigger stick. And he needs to understand the importance of speaking softly.

The only thing that Roosevelt forgot to mention was: do not go it alone. When Trump acts unilaterally, he plays right into Xi’s hands. Trump needs to gather allies, and to approach China multilaterally. It will increase his leverage.

The key to success is power coupled with kindness. Finally, if he does succeed, he should not crow about it. That in itself may be his biggest challenge.

Ken Wilcox is chairman of the Asia Society of Northern California

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