By Omar Nashashibi, The Franklin Partnership, LLC
The nonpartisan Pew Research Center regularly conducts opinion polls of what Americans think of other countries. It should come as no surprise that China does not rank highly on the US popularity charts right now.
Perspective: Public Opinion on China
Around the time of the 2016 US election, 47% of surveyed American adults saw China unfavorably, with 44% being favorable. This represents the highest favorable percentage for China among US adults since its peak of 52% in 2006.
In a survey conducted in March 2020, these numbers shift dramatically. Sixty-six percent of American adults said they have an unfavorable opinion of China, while only 26% report having a favorable view. An even more recent Pew Research poll of Americans from June 16 to July 14 breaks it down further, showing that 83% of Republicans hold an unfavorable opinion of China – a marked number that is a full 15 points higher than Democrats (the largest spread since 2005). This is not to say Democrats are supportive of China; in the same survey, one in five Democrats describe China as an enemy, with 61% saying they are a competitor.
Certainly, based on the data above, the way Americans view China has trended negative since the election of Donald Trump to the White House – but how does this impact the 2020 campaign and the future of manufacturing in America?
Both President Trump and former Vice President Biden would be committing political malpractice were they to not make China a central focus of their campaigns – and indeed, they both have. One ad from the Biden campaign attacks the president, saying “15 times Trump praised China, as the coronavirus was spreading across the globe.” This ad came in response to the Trump campaign’s video mocking Biden as “China’s puppet.”
Tariffs and the Trump Administration
In 2016, Trump won Michigan, Pennsylvania and Wisconsin by being anti-trade and largely focusing the ire of Midwest manufacturers on China. The strategy clearly worked, and the Trump administration went on to impose tariffs on thousands of Chinese imports. The president included Chinese plastic injection molds on the list subject to 25% tariffs and, although he suspended them following pressure from US importers, he then reinstated them after a coordinated lobbying strategy between the AMBA and The Franklin Partnership, resulting in 150 filed formal comments with the Office of the US Trade Representative from US mold manufacturers.
Despite the efforts, manufacturers report continued trade violations by China. After two years of tariffs on Chinese goods, 39% of Americans remain supportive of the president’s action. Combine the facts on the ground with the polling of voters’ feelings toward China, the obvious approach to winning manufacturing-intense states in 2020 is a battle for who is best suited to take on China.
Setting the Stage: The 2020 Presidential Election
Prior to COVID-19, President Trump had the upper hand against the former vice president on manufacturing, having imposed tariffs and concluded a Phase I deal with China in January 2020. However, since the onset of the virus, we have seen voters’ growing disapproval of the president’s handling of the coronavirus. In July 2020, 11 polls averaged a 58.6% disapproval rating.
These numbers pose a problem for the Trump campaign. The more he links China to the virus – and the more he is linked to the virus negatively – the likelier it is that voters may make the connection and agree with the Biden campaign. Regardless, each campaign is going to try and one-up the other when it comes to China.
One of the most difficult transitions a presidential candidate makes is from campaign promises to actual governing. Through an examination of past statements, current actions and candidate proposals, we can begin to piece together what a second Trump term may bring for US-China relations and how a Biden administration may govern.
A Second Trump Term
In January 2019, President Trump signed a Phase I trade deal with China, promising to increase by $200 billion purchases of US goods over 2017 levels, including ordering $77 billion in manufactured goods. Most were skeptical before COVID that China could hit those levels and, while the US deficit in goods with China widened over the summer, Beijing has reaffirmed its commitment to make the purchases.
However, all presidents immediately become a lame duck upon their reelection, giving China little incentive to concede. President Trump also is loathe to take on battles when a clear victory isn’t ensured. Because a Phase II agreement would require China to make significant and concrete changes (and not just purchase more US goods), it is unlikely that he would pursue this particular challenge.
As tariffs remain in place, President Trump will look at any China deal in the context of his legacy, but if he cannot secure a deal, tariffs likely will remain and could increase. This tariff action also would cover the 25% AMBA successfully lobbied to reinstate on plastic injection molds from China. Under this scenario, without a Phase II deal, many in Washington expect the tariffs to remain in place through 2021. Keep in mind, under President Trump’s trade strategy, there is no “carrot” approach in negotiations – only the “stick.” Expect little-to-no change, especially in the early months.
A Joe Biden Administration
During his five decades of public service in Washington, former Vice President and past US Senator Joe Biden clearly established himself as a multilateralist and internationalist. Whereas President Trump largely has chosen a bilateral approach to trade, preferring one-on-one country engagement, Biden likely will seek to build coalitions to confront China.
While his campaign strategically has chosen to not provide more details on its China tariff agenda, the campaign is focusing more on running against Trump’s current China approach. A Biden administration will elevate concerns over human rights, including China’s treatment of its Muslim population and addressing Hong Kong, while protecting Taiwan from a similar fate.
Sources in Washington and close to the Biden campaign indicate his administration likely would continue the Section 301 tariffs on Chinese products, including the 25% on plastic injection molds, at least into the spring and likely to summer 2021. Leaving the tariffs in place will provide a new Biden administration additional time to establish its trade policy and build coalitions with other countries.
More importantly, continuing the tariffs allows Biden to inherit a certain amount of leverage against China as Beijing – and many US importers – would like to see those tariffs lifted. However, just as it often is a fool’s errand to forecast the outcome of elections, predicting how Biden will act on trade in the summer of 2021 may be a similar undertaking.
Regardless of the election outcome, both a second Trump term and a Biden first will continue the focus on China, especially if the pathway to the White House runs through the Midwest as it did in 2016 and is expected to do again.
Like many political consultants, it is my job to undertake that fool’s errand each election season and predict outcomes to help businesses plan for the future. Irrespective of the White House occupant, we expect tariffs on China to continue into 2021, likely at least through the first quarter. President Trump will remain content to continue the status quo with tariffs in place throughout not just 2021, but the remainder of his second term without a comprehensive Phase II deal. Meanwhile, Biden will seek to expand the attack on China to include human rights, the environment and military encroachment, but take a more global approach with allies, while tariffs temporarily remain in place.
China is one of the few places where both candidates agree on the need for action and closely align on the preferred outcome, but strongly disagree on the approach. When it comes to presidential politics, for as long as manufacturers and Midwest voters remain among those who decide control of the White House, the candidates will have no choice but to listen to AMBA members and others calling for action on China. The one prediction I am certain to not get wrong in 2020 is that standing up to China will remain one of the few bipartisan issues left in Washington.
Omar Nashashibi is a founding partner at The Franklin Partnership, LLC, a bipartisan government relations and lobbying firm retained by the American Mold Builders Association in Washington, DC.