What is the end game with China?

What is the end game with China?
© Getty Images

As President TrumpDonald John TrumpPennsylvania Supreme Court strikes down GOP bid to stop election certification Biden looks to career officials to restore trust, morale in government agencies Sunday shows preview: US health officials brace for post-holiday COVID-19 surge MORE prepares to meet with Chinese President Xi Jinping this month, there is intense speculation about whether they will strike a deal over the tariffs imposed on $250 billion of Chinese goods. The divisions on the issue within the White House spilled out this week, with trade adviser Peter Navarro attacking American financiers for lobbying and economic adviser Larry Kudlow calling those remarks “way off” base.

But the focus on tariffs ignores emerging key parts of the White House strategy on Beijing. These are the targeted tools that are quietly ratcheting up pressure against the efforts by China to acquire cutting edge American technology. Even if the two leaders strike a deal on the tariffs, Trump can deploy these tools to keep up pressure on intellectual property theft and other illicit efforts to acquire American technology. More importantly, the internal dispute highlights the need for Trump to finally articulate the goals of his trade war, which remain strikingly unclear in the most significant United States trade dispute in three decades.


The first new tool in the arsenal of the administration has been a drastic increase in prosecutions of Chinese spies and hackers. Since last month, the Justice Department has brought at least three sets of charges against Chinese intellectual property theft and extradited one of the spies from Belgium to face trial in Ohio. This action represents a major new law enforcement focus on countering Chinese economic espionage.

The second new tool of the White House is targeted sanctions against firms that benefit from stolen American technology. The Commerce Department has restricted American companies from doing business with a Chinese chipmaker on the grounds that the chipmaker was using stolen trade secrets. This followed a decision to prohibit 44 parties linked to the Chinese defense sector from acquiring American technology. The administration appears set to target other Chinese firms complicit in intellectual property theft or otherwise threaten national security.

The third new tool is the implementation of legislation to strengthen review of foreign investments in the United States and to control the export of certain advanced American technology, such as artificial intelligence and autonomous vehicles, to China and other competitors. This law will restrict the ability of Beijing to acquire cutting edge technology and to force American companies to produce it to China.

Finally, the administration is belatedly using diplomacy to rally allies to the cause. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerWhiskey, workers and friends caught in the trade dispute crossfire GOP senator warns quick vote on new NAFTA would be 'huge mistake' Pelosi casts doubt on USMCA deal in 2019 MORE has recently launched working groups between the United States, Europe, and Japan to develop a collective approach to China. He also inserted a provision in the new North American trade agreement to require Canada and Mexico to notify the United States before starting trade negotiations with China, signaling that other countries should side with Washington over Beijing.

These new tools represent a welcome development on this front. Unlike tariffs, which are largely paid by American consumers buying Chinese made goods, these tools place costs squarely on the Chinese companies and officials responsible for abusing trade rules. They also send a clear message that aggressive United States trade policy really is about forcing China to end unfair practices, and not simply trade protectionism.

But these new tools risk being overshadowed by the biggest weakness this trade war against China. This is the ongoing internal dispute over what Trump wants Xi to do, which was highlighted in the public spat between Navarro and Kudlow. Members of the administration have highly divergent visions on the end game, ranging from a quick deal in which China will import more American energy and goods to systemic reforms by Beijing over the long term. National security hawks in the White House do not even really want a deal all. They see China as a competitor and speak of “decoupling” the two countries regardless of concessions.

Trump now has an opportunity to clarify his trade demands before the summit with Xi this month. Much as Vice President Mike PenceMichael (Mike) Richard PenceTrump set for precedent-breaking lame-duck period Trump pardons Michael Flynn O'Brien on 2024 talk: 'There's all kinds of speculation out there' MORE recently articulated United States goals on the South China Sea and other strategic disputes, Trump needs to lay out a tough and specific set demands that the United States can actually expect China to meet. Only by finally laying out those firm demands can Trump turn his growing arsenal of trade war tools into long overdue reforms out of Beijing.

Peter Harrell is an adjunct senior fellow at the Center for a New American Security. He served as deputy assistant secretary for counter threat finance and sanctions at the State Department during the Obama administration.