OPINION — The United States and China are in what you might call a Cold Competition – if not a Cold War. One nation wants to preserve the world order established after WWII and its dominant place in Asia, while the other wants to alter significantly that post-war world order and replace the U.S. as the dominant power in Asia. The “tariff war” is just the latest round in that competition.
It is in the best interests of both parties to settle this dispute—something I believe both sides recognize—and three lessons from the history of U.S.-China relations suggest how this could happen. In both capitals we have strong leaders with outsize egos, and both are dealing with complex internal political situations. One leader’s style is more “in your face” and the other’s is all about saving face, a very important element of Chinese culture. Let me say that I have no issue with the Trump Administration’s efforts to achieve a redress of the U.S.-China trade imbalance—and other bilateral issues—and I wish them well. But I believe a change of tactics would give the U.S. a better chance of achieving its goals.
Imaginging a way out of the tariff war
It is my experience that Beijing can be very flexible in addressing bilateral issues as long as face is preserved, and the outcome can be presented to the Chinese people by its leaders as an outcome favorable to China. The biggest stumbling block to the normalization of U.S.-China relations in 1972 was the status of Taiwan, which the United States at the time recognized as the legitimate government of all China. But in negotiations with Mao and Zhou Enlai on one side and President Nixon and Henry Kissinger on the other, a formula was struck—a principle—that was as truthful as it was ambiguous: Chinese on both sides of the Taiwan Strait agree there is only one China. Embedded in the Shanghai Communique, this principle allowed the U.S. to establish a liaison office in Beijing and eventually paved the way for full normalization during President Carter’s term.
The driving consideration in China at the time was the threat that Beijing saw from the Soviet Union and the belief that a relationship with Washington would work to their benefit. But the Taiwan issue had to be finessed. The lesson here is that China can be terribly practical after some vague principle is agreed to. The Chinese warned the U.S. that it might have to fire off “some empty cannons” to preserve face, but that Taiwan was an issue that could be pushed far down the road.
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A lesson from 1999
The May 1999 accidental bombing of the Chinese Embassy in Belgrade by NATO is a case where a very tense situation between China and the West was diffused. Beijing believed the attack was intentional—intelligence personnel were among the casualties—and rioting in Beijing caused significant damage to the U.S. Embassy and some Consulates in China. PRC leaders initially declined a phone call from President Clinton—the Politburo was probably trying to decide what and how to respond—and state media carried out a blistering attack on the U.S. and NATO.
In a call between Clinton and the General Secretary of the Chinese Communist Party a week after the incident, the President expressed “regret” for the incident, something just short of a formal apology. Flags were also ordered to fly at half-mast at U.S. diplomatic missions on the mainland and in Hong Kong. Final resolution was reached when the U.S. agreed to a “voluntary humanitarian payment” to the families of three Chinese killed and compensation for the damage to the Chinese Embassy in Belgarde. The PRC agreed in turn to compensate the U.S. for damage done by the rioters.
In April 2001, a U.S. Navy P-3 signals intelligence aircraft was intercepted by two PRC fighter jets. A collision ensued, killing the pilot of one of the Chinese planes, and the P-3 was forced to make an emergency landing on Hainan Island. The Chinese pilot was clearly at fault, and there had been a number of near misses earlier. The U.S. plane and the crew were immediately interned and interrogated as temperatures rose in Washington.
This crisis lasted ten days and was resolved in a familiar way. The Chinese wanted an apology but accepted ‘the letter of two sorries”—sorry that the pilot had died, and sorry the plane entered Chinese airspace because the landing did not have “verbal clearance.” The Chinese exploited the downed aircraft for its intelligence value and even charged the U.S. government for housing and feeding the crew. But the crisis was resolved.
In each of these instances, a way was found to lower the temperature and come up with a diplomatic formula that did not give either side all it wanted but allowed both to “save face” and claim some element of victory. Both sides saw a clear advantage in ending the confrontation, and in each case, the final resolution was achieved out of the public eye.
I believe both the U.S. and China want to resolve the current tariff war. History strongly suggests that a resolution will require three things: getting the dispute off the front page and into negotiating channels; finding face-saving language that both parties can live with; and the involvement of both President Trump and General Secretary Xi.
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