Trade wars aside, Trump’s 'Taiwan Card’ is China’s real worry

[chahlley18]

                                      (World Today Wednesday 14 March 2018)

 Trade wars aside, Trump’s 'Taiwan Card’ is China’s real worry

A man holds flags of Taiwan and the United States. The biggest potential flash point between US

President Donald Trump and his Chinese counterpart Xi Jinping is Taiwan. Photo: Reuters

Updated 14 March, 2018

BEIJING — Forget steel and intellectual property. The biggest potential flash point between United States President Donald Trump and Chinese counterpart Xi Jinping is an island of 23 million people sitting off China’s coast.

Even as global investors shift from worrying about a second Korean conflict to a potential China-US trade war, decades-old disagreements over democratically run Taiwan are simmering.

For China at least, that is a more serious concern.

“Compared with economic and trade issues, the Taiwan issue is a top priority for Beijing and is more politically sensitive,” said Professor Fu-Kuo Liu, an international relations expert at National Chengchi University in Taipei.

“The US will measure relations with Taiwan based on its national interest, and Taiwan will be a pawn to Beijing.”

The dispute centres on Taiwan’s 70-year slide into diplomatic isolation after ending up on the losing side of the Chinese civil war.

While the island is self-ruled and enjoys American military protection, China considers Taiwan a province and has made acceptance of its “one-China” claim a precondition for diplomatic ties — including with the US.

On trade, China has sought to maintain what it calls “strategic composure” as Mr Trump escalates his threats, launching a probe of US grain imports while warning against a trade war.

Trump’s planned tariffs on steel and aluminum would apply to a variety of countries, not just China, which accounts for a relatively small portion of American imports. Indeed, Taiwan faces a bigger hit.

But challenging Mr Xi on Taiwan — a central focus of his “Chinese dream” of national rejuvenation — would be another matter.

Mr Trump’s firing of US Secretary of State Rex Tillerson, a former Exxon Mobil chief executive officer with many years of China experience adds more uncertainty to the issue.

His nominee for the role, Central Intelligence Agency Director Mike Pompeo, warned just days ago of the “Chinese threat” to American interests, although he hasn’t said much recently on Taiwan.

Some US national security hawks have long advocated greater Taiwan ties as a bulwark against China.

Although Mr Trump signaled he might try that strategy — holding an unprecedented December 2016 phone call with Taiwan’s president Tsai Ing-wen — he later reaffirmed support for the one-China principle while seeking Mr Xi’s cooperation on North Korea.

Now, a series of moves in Beijing, Taipei and Washington are threatening to bring the Taiwan question back to the fore. One Chinese official in Beijing said there was concern that Mr Trump could play the “Taiwan card” and that the government was prepared to take a strong stand against any US moves on the issue.

Tensions have been steadily rising since Taiwan’s 2016 election, which replaced a China-friendly government with one run by the pro-independence Democratic Progressive Party.

Ms Tsai has angered China by refusing to endorse the one-China framework while offering to sign a US free-trade deal and buy more advanced American arms.

In response, China has ratcheted up pressure on Ms Tsai, picking off Taiwan’s few remaining diplomatic allies and launching regular “encirclement patrols” with military jets around its airspace.

China’s decision on Sunday to remove presidential term limits gives Mr Xi even more incentive to see through his pledge for Taiwan’s “peaceful reunification.”

Meanwhile, Taiwan’s allies in the US Congress have pressed for greater support, passing legislation last month allowing for diplomatic exchanges with Taiwan “at all levels,” specifically citing “cabinet-level national security officials.” Signing the bill and holding such visits would signal whether Mr Trump intends to test China on Taiwan.

He could grant Taiwanese requests to buy advanced weapons such as Lockheed Martin Corp’s F-35 fighter jets.

While such moves risk provoking a confrontation with China, Mr Trump has shown a willingness to use available leverage in showdowns over North Korea, health care and immigration.

And he’ll need to apply a lot of pressure, if he expects China to cut anywhere near US$100 billion (S$131 billion) from its US$375 billion trade surplus with US.

“Taiwan is a diplomatic card for Trump to play when he needs to annoy China,” said Ms Cheng Yu-Chin, director of the EU-China Economics & Politics Institute in Prague.

“In the future, Taiwan will suffer even more, as it gets caught in the middle between a stronger China and a inward-looking US.”

National security policy documents published by the Trump administration have described China as a “strategic competitor” and urged greater efforts to support allies in the Asia-Pacific region. The US provides military support to the island under the Taiwan Relations Act of 1979.

A stronger line on Taiwan might also find supporters among congressional Republicans.

Arkansas Senator Tom Cotton — a vocal ally of Mr Trump — has criticised China’s efforts to isolate Taiwan and said after the Taiwan Travel Act’s passage last month that “only US leadership can push back against this aggression.”

China has signaled it will have little patience with the US if it attempts to upgrade its relationship with Taiwan.

In December, a senior Chinese diplomat in Washington warned that China would “unify” the island by military force if a US warship made a port call there.

Mr Zhou Qi, director of the Institute of American Studies at the state-run Chinese Academy of Social Sciences, said any effort to play the Taiwan card would backfire on the US.

“To the Chinese government, Taiwan is the primary issue in US-China relations,” Mr Zhou said. “And it can’t be used as a bargaining chip in trade talks.” BLOOMBERG