Trump aides seek to placate China ahead of trade move

Top aides to Donald Trump have sought to placate China, insisting the country is vital to resolving the nuclear crisis over North Korea’s nuclear programme, even as the administration prepares its first direct trade attack on Beijing. 

Mr Trump is expected to sign a presidential memorandum on Monday asking his top trade negotiator to examine launching an investigation into China’s intellectual property regime. Administration officials say the move signals a tough new US approach to Beijing’s unfair trade practices. 

The step could lead to US tariffs and other restrictions on Chinese imports within a year in what many see as the potential first step towards a trade war between the world’s two largest economies. 

But top aides to the president tried to play down such trade tensions as they sought Beijing’s help in dealing with North Korea. 

HR McMaster, Mr Trump’s national security adviser, said on Sunday that China’s help was vital to resolving the North Korea crisis and that the US was not looking for a trade conflict. 

“The operative word is not ‘punish’. The operative word is to compete effectively, to demand fair and reciprocal trade and economic relationships with not just China but with all countries,” he told NBC television.

Speaking to reporters on Saturday, other senior administration officials insisted that the issues of North Korea and trade should not be linked. “These are totally unrelated events. Trade is trade. National security is national security,” one said. 

But Mr Trump, who won the presidency last year on the back of promises to crack down on China’s unfair trade practices, has repeatedly made the link himself. “We lose hundreds of billions of dollars a year on trade with China,” he told reporters last week. “But if China helps us [with North Korea], I feel a lot differently toward trade.”

The US president discussed North Korea with his Chinese counterpart Xi Jinping on Saturday (Beijing time).

Analysts fear that Monday’s trade move and the mixed messages around China reflect a lack of an administration strategy for dealing with Beijing.

Mr Trump’s threats to take action against China on trade have so far yielded little, with the president deferring a decision to label Beijing a currency manipulator.

Even Monday’s initiative is likely to prompt little tangible action before 2018, with an investigation into China’s intellectual property practices likely to take up to a year and include negotiations with Beijing, according to senior officials. 

“I don’t see a broader strategic vision for what the Trump administration needs to do to engage with China,” said Chad Bown, a former trade policy adviser to President Barack Obama and now at the Peterson Institute for International Economics.

“Threats just don’t work over the long run.” 

Xie Peihong, a researcher at the Center for China and Globalisation, said the US president had already lost some credibility with the Chinese leadership, which was unlikely to change its behaviour towards North Korea substantially as a result of Mr Trump’s threats. 

“China is an independent country and will not do whatever the US says. North Korea and China have long enjoyed friendly relations. For national security reasons, we will not treat North Korea as an enemy,” he said. 

China was likely to exercise some restraint in the short term in the face of Mr Trump’s trade move, with Beijing inclined to wait to see the results of any investigation, said Bo Zhuang, a China analyst at Trusted Sources consultancy. “When the US moves to actual steps, then China will have to react,” he said. 

That reaction, he added, could include Beijing launching its own investigations of US companies such as Apple and Walmart, though it could also try to head off US criticism by offering better market access for overseas companies in service sectors such as banking and insurance.

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