Gilman Louie: The Art of the Deal – with China

Gilman Louie and Joseph DeTrani address how the new administration can navigate the U.S. – China relationship. This article was originally published on The Cipher Brief.

President Trump said he wants to improve relations with China, but he has expressed concern with China’s theft of intellectual property, unfair taxes for U.S. companies in China, currency manipulation, product dumping and failing to reign in North Korea.  He took a congratulatory call from the President of Taiwan and questioned the “One China Policy.”  Many of his appointees have strong and divergent views on the issue.

Although the economies of the U.S. and China are mutually dependent, the possibility of a trade war cannot be dismissed.  Politically, tension in the South China Sea could purposely or accidentally devolve into military conflict.  Both scenarios can and should be avoided.

President Trump is an accomplished negotiator and in his book, The Art of the Deal, he describes several negotiating tactics that could be key to resetting U.S.-China relations. Here are a few we think are particularly applicable:

Think Big – Design a plan that benefits both the U.S. and China.  The U.S. has to modernize its manufacturing sector, return jobs lost to offshoring, incentivize U.S. companies to repatriate capital and invest that capital into infrastructure and manufacturing capacity – as well as open the Chinese market to U.S. goods, especially services.

While China has done well in some areas of consumer and manufacturing innovation, it needs to increase its innovation in all areas of (Read more...)