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January 23, 2025

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As Trump returns, whither China-US ties in next 4 years?

As everyone waits to see what the second Donald Trump presidency means for Sino-US relations, experts on the subject offer insights on what to expect.

“I don’t think it’s particularly wise to try to think specifically about what Donald Trump is going to do in the future,” said Scott C. Miller, economic historian and director of the project on Democracy and Capitalism at the Miller Center of Public Affairs at the University of Virginia.

“We have seen many times that Donald Trump acts on instinct, which doesn’t necessarily hold over long periods of time.”

Miller was among those attending a recent forum on Sino-US relations at Fudan University in Shanghai. The session was entitled “Navigating Turbulent Times: US-China Relations in the Next Four Years.”

The forum was jointly organized by the Center for American Studies at Fudan University, the Miller Center of Public Affairs at the University of Virginia, and the Center for Asia-Pacific Resilience and Innovation USA Foundation.

“Today, we are entering a very difficult and challenging period, but personal friendship continues,” Wu Xinbo, professor and dean of the Institute of International Studies and director of the Center for American Studies at Fudan, said in opening remarks.

Wu, a former visiting scholar at George Washington University and the Brookings Institution, said the Trump phenomenon has deep roots in a politically polarized and socially fragmented America that emerged in the aftermath of the 2008 financial crisis. He emphasized the importance of dialogue and people-to-people exchanges.

Harry Harding, a senior fellow at the Miller Center and a specialist on Asia, discussed misunderstandings including those that arise from different interpretations of the same word in bilateral relations.

“The big American myth about China is that Chinese are just like Americans, and, therefore, Chinese eventually will become just like Americans. Hence, the great disappointment,” he said when Shanghai Daily spoke with him on the sidelines of the forum.

“And on the Chinese side, it is the idea that China is constantly experiencing humiliation – ‘the century of humiliation’ – and that the US is always trying to humiliate China,” he said.

Shanghai Daily sat down with Professor Miller for an exclusive interview on Trump’s potential China policies and on the outlook for US-China economic competition.

Q: Donald Trump has seemed relatively softer on China recently, while sounding tougher on countries like Canada, Mexico and Denmark. Do you think that is spontaneous or strategic? And do you think tariffs will be his first policy initiative toward China?

A: What Trump says is consistent with what he has said for a long time. If we want to get a very good sense of what he will do, the question is: What things does he seem to really hold in his core?

His belief that tariffs are a good way of restructuring an economic system is something he has believed since the 1980s. He fundamentally thinks tariffs are good and work.

I would be equally surprised if he came out to institute tariffs on China or on American allies in Europe, like France. Neither would surprise me, equally.

For him, it’s about tariffs, not necessarily which country it is.

When it comes to China, I think the thing he cares about more than anything else is being seen as a deal maker; classically, that’s the name of his book.

Q: From a historical perspective, was there a time when tariffs worked well for the US?

A: Alexander Hamilton, one of our founding fathers and the first secretary of the treasury, tried to set up an economic system for a colonial economy that had just gained its independence from Britain.

The question for him was how to create a self-sustaining and independent American economy that was no longer reliant on British colonial policy.

For a very small group of goods, he instituted moderate tariffs. They were only on goods he considered directly connected to national security, which meant anything from gun powder to sail cloth and turpentine.

It was a very calculated, specific and targeted policy. That was the very beginning.

After our Civil War, the Republican Party was very in favor of tariffs, to the point where by the turn of the 19th century, there were very high tariffs imposed by the president at the time, William McKinley. They were around 70 percent.

There is a debate among scholars about how successful those tariffs were. Some people would say American industry would have developed just fine without them. I tend to be in that camp.

There is pretty good empirical evidence that the tariffs didn’t promote American industrialism.

That is a long way of answering the question.

Tariffs have been a part of American history, since the very beginning, sometimes quite small and targeted, sometimes quite robust, and it really depends on the political process and how that plays out.

Q: Were the tariffs part of international strategy or more an expression of domestic politics?

A: It had a lot to do with international economics.

The tariffs in the 19th century, both before and after the Civil War, were in many cases a reaction to policies by the global hegemon – at the time, Britain.

Whenever the British enacted policies to hurt Americans, the Americans would react in specific ways.

But a lot of it had to do also with who was in power and what regions of the country they represented.

For example, people who really tended to support tariffs were from New England because that’s where lots of American industries were.

A lot of it involves foreign considerations, and a lot of it is domestic politics.

Q: You talk of British hegemony in that era. Isn’t US the dominant power now that doesn’t need to react to other superpowers?

A: I honestly think people outside the US have a much greater sense of American power than most Americans do.

When they say, “America is now the superpower so why are they thinking about instituting tariffs?” I think a lot of Americans would respond, “No we are reacting. We are still the small guy reacting to other big forces.”

Those “big forces” wouldn’t necessarily be specific countries in this case, but rather the global system.

I have a good sense of American economic power, and I don’t think that’s accurate. But if you are trying to get into the head of those people who support tariffs, I don’t think they see us as this massive global hegemon.

Q: And those are also the same people who tend to believe in American exceptionalism. Isn’t that paradoxical?

A: American exceptionalism doesn’t necessarily mean it’s the biggest or the most powerful country. The conception is unique in many ways because of the values on which it was created and formed – that there is something unique about the American system of government and institutions.

But I don’t think they consider that American exceptionalism simply means America is the hegemon.

Thomas Jefferson, for example, absolutely believed that America was exceptional, but that was when we had just gained our independence. So to him and many people today, we can be both exceptional and the small guy on the block.

Q: Are these the same people who support “bringing manufacturing back?” Do you think it can be done?

A: Doing it on broad scale would be very difficult.

When we talk about bringing manufacturing back, most people are not talking about producing goods in the United States, they are talking very specifically about jobs in manufacturing. The US actually still manufactures a lot, but the work is done by robots.

Manufacturing will come back to the United States, but it’s going to look very different.

The manufacturing jobs that existed in 1950s didn’t come back, and I don’t think they ever will.

When people say that manufacturing has gone overseas, they are not really talking about actual production of goods going overseas, but rather the effects on factory towns. It’s not really about upping productivity numbers, but about trying to reconstitute and bring back jobs that were lost.

The classic example is Detroit, which is a really amazing recovery story. But the city has not come back the way it was before, with all the automobile plants around the city. They still exist to a degree, but the city’s revival is based on a burgeoning entrepreneurial scene, a tech scene and a lot of service jobs.

The coal mines in West Virginia, for example, are not reopening, no matter how many tariffs you impose or how many protectionist policies you adopt.

Q: It’s surprising to see Americans railing against free markets in recent years. Isn’t America supposed to be the most capitalist country in the world?

A: Most people are outcomes-based more than ideological.

The American system is still quite capitalist, but I think people are far less willing to completely support free market doctrine if they don’t see it working for them, if they don’t see it producing outcomes that improve their lives.

And it’s not just about actual outcomes, but also about whether Americans feel outcomes could be better.

There is concern about inequality in the US, but I don’t think Americans are as concerned with inequality as many people think. I think they are more concerned about whether the mobility from rich to poor and from poor to rich is open.

Most Americans do not have a problem with rich people if they feel that they can rise and the rich can fall. But if they feel the rich will always be rich and poor always poor, that’s when they get very angry. Undoubtedly, that mobility has gotten worse in the US.

Q: Given all the existing trends, how can Sino-US economic cooperation work in the next four years?

A: The way US and China can work together very well is by setting the rules by which we can compete really well with each other.

On things like AI, climate and other areas, if US and China can agree on a set of rules, and say, “okay, here are the rules, now we go out and compete” – that would be phenomenal.

Q: Professor Harding talked about the cultural interpretation of words. When I asked about “economic cooperation,” you replied with “competition.” In a similar way, when the US says China is a strategic competitor, some Chinese may see that as strategic rivalry.

A: It makes perfect sense that China would be a huge competitor of the United States.

Just because it is our great competitor doesn’t mean it’s our enemy. They can be the same, but they don’t have to be.

Competition is a very good thing. One of the things that forces the United States to continue to evolve and change and become more dynamic has always been the presence of a rival.

When you don’t have a competitor, you get lazy and things can go wrong.

It makes perfect sense that China is a mammoth country with a lot of really good things going for it.




 

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