Trump might reconsider trade policy after midterm elections: expert

The United States and China need to steer their bilateral relationship back on the right course, as the two countries are aware of areas where their major interests overlap, according to an expert.

For China's part, the world's second-largest economy has fallen out of favor with American companies due to its inability to protect intellectual property, said Walter Lohman, director of the Heritage Foundation's Asian Studies Center.

In order to win the support of American companies, China needs to further its reforms aimed at protecting the interests of foreign companies doing business in China, said Lohman.

American business groups could be considered a powerful force that is able to lobby the US government to maintain a sound economic relationship with Beijing, which is at odds with Washington over trade.

In Lohman's opinion, without the lobbying of American business groups, policymakers in Washington would become more inclined to focus on geopolitics, thus leading to tensions over trade between the United States and China.

In the short term, what China should do is to assure American companies of its determination to protect intellectual property and widen market access, said Lohman, adding that the US-China relationship could be improved if the two countries could hold talks on these issues.

Last week, China said that it would cancel planned trade negotiations with the United States after US President Donald Trump imposed a new round of tariffs on $200 billion of Chinese goods, which triggered Beijing's immediate retaliation with tariffs on $60 billion of American goods.

The fresh tariffs brought "new uncertainties" to the bilateral talks, said a spokesperson of China's Ministry of Commerce.

Lohman does not consider tariffs as a good option for the Trump administration to deal with China, saying that the best way should be using the dispute settlement mechanism of the World Trade Organization.

Specifically, the United States could file an appeal to the WTO panel on Chinese government subsidies on experts and China's incompetence in protecting intellectual property in an effort to force Beijing to make changes, according to Lohman.

However, Trump did not use the WTO rules as a weapon, and even said in an interview with Bloomberg in August that he has intent to pull his country out of the international trade organization if it does not treat the United States better. "If they do not shape up, I would withdraw from the WTO," said Trump in the interview.

It is after the US midterm elections scheduled to be held in November that Trump might reconsider his trade policy toward China, said Lohman. But the expert is not sure when the two countries could mend fences, which is based on whether Beijing would improve its business environment for US firms and fulfill its commitment on economic reforms.

This week, without grounded evidence, Trump accused China of attempting to interfere in the American midterm elections due to his tough trade policy at a meeting of the United Nations Security Council. Trump's accusation was denied by Chinese Foreign Minister Wang Yi, who was attending the meeting, saying, "China has all along followed the principle of non-interference in other countries' domestic affairs."

Amid concerns that the United States might cooperate with Japan and the European Union to challenge China over trade, Lohman said that China could gain advantage in Southeast Asia, a region which the United States pays less attention to, said Lohman. But he said that a trade deal between the United States and Mexico could be an attraction to countries in Southeast Asia, with which China maintains good economic and trade relations.

The trade turmoil between the United States and China has also spilled to the military relationship between the two countries. It is reported that China has called off friendly engagements with the US Navy, possibly because of their trade spat. Earlier this week, US B-52 bombers also flew from Guam and transited through the disputed waters in the South China Sea. Beijing claims a large swathe of the South China Sea, where it has built manmade islands and established military facilities.

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