China, or more specifically, the Chinese Communist Party (CCP), has taken some actions that some are describing as a “shot across the bow” to the incoming Trump administration. The problem is this: The very term “shot across the bow” implies that the shot is fired from something big, like a naval gun. But China’s action here is more like a shot from a kid’s BB gun – or at least, it would seem that way on the surface.
China’s decision this week to slap several major U.S. defense firms with penalizing trade measures is being viewed as a “shot across the bow” ahead of President-elect Trump’s inauguration.
The move — targeting defense contractors Raytheon, Boeing, General Dynamics and Lockheed Martin — adds to U.S.-China tensions heading into Trump’s second term, though experts say it’s unlikely to greatly affect bottom lines.
But it could be a sign of a brewing tit-for-tat as the two superpowers jockey for economic and military leverage.
The reason that this is mostly a tempest in a teapot is that these firms are primarily defense contractors in the business of making weapons. As such, they are already prohibited by U.S. law from selling their products to China without a specific presidential waiver, which President-elect Trump certainly will not issue.
Firms that are primarily weapons companies, including Lockheed Martin, General Dynamics and Raytheon, already do little business with China given U.S. law bars the sale of all military items to Beijing unless the sitting president waives the ban.
While such companies have non-weapons-related parts, it’s not central to the business, making China’s recent sanctions mostly symbolic, according to Bill Reinsch, a former Commerce Department official and now the Scholl chair in international business at the Center for Strategic and International Studies, a Washington-based think tank.
So this appears to be a largely symbolic move, but symbolic moves can be game-changers, too. This move likely won’t be one of those. It’s almost certainly the opening round in a new series of trade negotiations between the CCP and the incoming Trump administration. Chairman XI isn’t an idiot; he has a reasonably good grasp of what’s going on in the American political world, and he knows that there will be some serious changes in America’s policies where China is concerned.
The CCP has been growing increasingly bellicose for a while now. And, as I’ve pointed out many times in the past, China is and always has played the long game; in fact, they do it better than we do. This is a culture that measures its history in thousands of years rather than the hundreds that Americans think in terms of. We should be prepared to deal with them and counter them economically where possible because they are our trade partners but not our friends.
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Will Donald Trump make a historic “Only Nixon could go to China” moment? Or will Sino-American relations just keep deteriorating?
Or will it be both? The two are certainly not mutually exclusive. This act by the CCP is part of the same overall message that has Chinese aircraft and ships intruding on the Phillipines and trailing their coats down the Alaskan coast. The message is very clear: “We won’t be pushed around, and we think we can stand toe-to-toe with the United States and give as good as we get.”
The thing is, they are probably right.
