Since the advent of the Trump administration, US Asia policy has reflected more continuity than change. No more. The one exception has been US security policy, which continued to reflect time-honored principles, including the centrality of US alliances and deterrence. Changes have come at a breathtaking pace in the past few months. Credit (or blame) the emergence of “the real” Donald Trump, who has shrugged off the constraints and conventional wisdom that had kept him largely within the mainstream of US foreign policy practices. His decision to meet North Korean leader Kim Jong Un stunned most observers and led to a series of summits in anticipation of his historic meeting with Kim. The “Disruptor-in-Chief” was also hard at work on economic policy, with the imposition of tariffs on steel and aluminum exports by US trading partners. Trade tensions between Washington and Beijing grew throughout the first four months of 2018 and there are fears of a trade war in the absence of astute management.

National defense strategy: compete, deter, and win

Like the National Security Strategy (NSS) document we reviewed in our last issue, the follow-on National Defense Strategy (NDS) – or, more accurately, the unclassified 2018 Summary of the National Defense Strategy: Sharpening the American Military’s Competitive Edge – spells out the broad array of challenges facing the United States. Unlike the NSS, it prioritizes the threat from the Pentagon’s perspective: “Inter-state strategic competition, not terrorism, is now the primary concern in US national security.” Not surprisingly, China, Russia, North Korea, and Iran enjoy pride of place in the report. Underscoring the administration’s argument that “America First does not mean America Alone,” the 11-page unclassified summary contained over three dozen references to “allies and partners” or “alliances,” and stresses the importance of cooperative approaches to meeting today’s security challenges. This public statement on US defense strategy can also been seen as Defense Secretary Jim Mattis’ tutorial to the administration and Congress about the criticality of defense security cooperation centered around the US alliance structure.

The administration also released its 2018 Nuclear Posture Review (NPR). While critics have focused on the differences with the Obama administration’s 2010 NPR, there were many similarities: both saw nuclear weapons as a last resort and endorsed the ultimate goal of a world without nuclear weapons; both reinforced the importance of extended deterrence – providing a security, including nuclear, umbrella over US allies – and the importance of strengthening conventional deterrence; and both called for dialogue with Russia and China to promote cooperation and enhance stability. Both also called for a much-needed modernization of the US nuclear arsenal, although the 2018 document reflected a greater sense of urgency given the re-emergence of great power competition. Perhaps the most controversial element was the 2018 NPR’s call for acquiring new low-yield warhead capabilities, which proponents believed would make nuclear deterrence more credible. Critics warned that such weapons made the use of nuclear weapons more likely, and would thus be destabilizing. We have not heard the end of this debate.

Kim Jong-Un and summits galore

We had anticipated Kim Jong-Un’s “peace offensive” but never imagined it would have this degree of “success” this early. Chairman Kim has gone from international pariah to everyone’s favorite prom date in a few short months, having recently met both Chinese President Xi Jinping and South Korean President Moon Jae-In. The latter meeting helped prompt the former, as did the shocking announcement – made, untraditionally, by a South Korean envoy at the White House rather than from the US president or his spokesperson – that President Trump would personally meet Kim Jong Un sometime in late May or June. [Editor’s note: It was announced on May 10 that the summit would occur in Singapore on June 12.]

President Xi had previously refused to meet with Kim, reportedly out of frustration and annoyance with the North Korean leader’s actions, which “disrespected” Beijing. Suddenly, it appeared as if Xi was playing catch-up to avoid being marginalized in the emerging peace offensive. Japanese Prime Minister Abe Shinzo quickly began signaling his own willingness (eagerness?) to meet Kim; can Putin be far behind? Abe also rushed to Washington seeking reassurance from Trump that their previously closely synchronized hardline approach toward Pyongyang would not be undermined. He also hoped, to no avail, that his bromance with Trump would get Japan excused from impending steel tariffs. More on this later.

North Korean leader Kim Jong Un and Chinese President Xi Jinping shake hands in Beijing, China (Xinhua)

President Trump has received – and taken – a great deal of credit in stimulating the North’s diplomatic overtures (although calls for awarding him the Nobel Peace Prize strike us as incredibly premature) and there is no doubt his earlier “fire and fury” threats and “extreme pressure” campaign have contributed to the current flurry of diplomatic activity. How they contributed remains a subject of debate, however. Did threats of war or increasingly tighter sanctions frighten Kim to the table? Or, did the prospect of conflict so scare President Moon that he offered incentives to Kim to cooperate?  Or is this all part of a clever North Korean ploy, with Moon and Trump eagerly taking the bait? Only time will tell.

The North Koreans, of course, firmly reject the idea that they have been frightened or bullied into making diplomatic overtures; Pyongyang sees itself entering into the diplomatic arena from a position of strength, not weakness, due to its “powerful deterrent.” Skeptics (like ourselves) also see the assertion in the Panmunjom Declaration for Peace, Prosperity and Unification of the Korean Peninsula that “South and North Korea confirmed the common goal of realizing, through complete denuclearization, a nuclear-free Korean Peninsula,” not as an acceptance of the US demand for CVID – complete, verifiable, irreversible denuclearization – but as a North Korean statement that Korea Peninsula denuclearization first requires global disarmament. It’s been Pyongyang’s longstanding position that it would be willing to enter into global disarmament talks with the US and other nuclear powers, an action that would essentially legitimize the DPRK’s status as a nuclear weapon state.

Skepticism aside, the Moon-Kim summit provides cause for cautious optimism, although – as is the case with anything involving Pyongyang – the emphasis must be on the word “cautious.” One largely overlooked statement in the Panmunjom Declaration seemed particularly significant: “South and North Korea agreed to actively pursue trilateral meetings involving the two Koreas and the United States, or quadrilateral meetings involving the two Koreas, the United States and China with a view to declaring an end to the War, turning the armistice into a peace treaty, and establishing a permanent and solid peace regime.”

In the past, the North has argued that any peace treaty should be between the US and DPRK, or at most the US, DPRK, and China. The ROK was always the odd man out from Pyongyang’s perspective. Taken at face value, this statement indicates that Pyongyang is now ready to negotiate a peace accord with Washington and Seoul; it is Beijing whose participation appears to be optional. If Pyongyang means what this says, this is an encouraging, potentially significant, breakthrough.

By President Moon’s own admission, the Kim-Moon summit, symbolically important as it was in its own right, was also the scene-setter for the unprecedented meeting between a sitting US president and North Korea’s leader. A more conventional US president would have insisted on some deliverables in advance of a summit, which critics claim bestows undeserved credibility and prestige on Kim Jong Un. If we have learned nothing else in the past year, it is that President Trump is not your conventional US leader. The only thing that appears to be rising higher than expectations about the summit meeting are anxieties that it could fail and result in disaster. This disaster could take the form of Trump walking out in anger, leaving few options on the table short of even more extreme pressure and/or some type of military action. Or it could take the form of Trump being tricked into what seems like a good deal by the North Korean leader, whose real goal is not denuclearization but a lifting of sanctions and the gaining of international credibility and status as a member of the nuclear weapons club.

US Secretary of State Mike Pompeo and North Korean leader Kim Jong Un shake hands in Pyongyang

While we have argued that one underestimates Kim at his own peril, the same could be said for Trump. Recent personnel changes, including Mike Pompeo’s position shift from head of the Central Intelligence Agency to secretary of State and John Bolton’s transformation from Fox News’ warmonger-in-chief to national security adviser to the president, insure that two hardline skeptics will be whispering in Trump’s ear about any deal proffered by Kim. It’s easy to guess what they will be cautioning; more difficult is predicting whether Trump will listen. For example, Bolton and Pompeo, along with most of the national security establishment, understand the importance of the US forward military presence on the Korean Peninsula (and in Japan) and would caution against negotiating it away. Rumor (reinforced by tweets) suggests Trump might be more inclined to play the troop deployment card.

Given the leadership system in Pyongyang and Trump’s mercurial tendencies, it is absolutely essential that both leaders agree on general principles and objectives if there is ever going to be real prospects for peace on the Peninsula. While more traditional summits usually signal the end of a diplomatic process, the Trump-Kim meeting will at best merely signal the beginning.

Trade wars in the making?

After a year chomping at the bit, Trump finally got to unleash his instincts on the economic front – and the results have been disturbing. Economists challenge virtually every key assumption of Trump’s economic policies. Bilateral trade deficits are not indications of economic weakness. Manufacturing is not the critical sector of post-industrial economies. Job losses are not primarily the result of international trade. Trade wars are not “easy to win.” Multilateral trade agreements are not tools to exploit the United States, nor does membership in such arrangements constitute unilateral disarmament.

Nonetheless, the president remains committed to an avowedly protectionist economic agenda in his effort to “put America first,” arguing that he is like every other national leader who seeks to protect national interests. Since taking office, Trump has sought to tear up existing trade deals or withdraw from multilateral arrangements so he can use US economic might to win better terms in bilateral economic relations. He considers unilateral sanctions a powerful tool to win concessions and, after a year of frustration, the first four months of 2018 were punctuated by a flurry of actions on trade that allowed him to put his governing philosophy to work.

In early March, the US announced it would impose a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962, ostensibly to protect US national security. Allies pointed out that they were unlikely to cut trade in an emergency, undercutting the fundamental rational – and legal basis – for the move. The sanctions were not imposed immediately so that affected countries could work out agreements with Washington on ways to voluntarily restrain exports to the US and rebalance the books. A deal was struck with South Korea – some argue that it was shrewd with minimal changes – and negotiations proceeded with several other trade partners. Worryingly, however, neither the European Union nor China bent. Instead, both announced that they would retaliate with sanctions on their own.

On April 30, the administration announced that it would delay a final decision on tariffs on the EU and other US allies until June 1, to allow more time for talks. The EU drew up its own list of targets for US exports and said that it would only discuss ways to address trade imbalances when the US withdrew the threat of sanctions.

As the storm gathered, Japan remained within the president’s crosshairs, despite repeated attempts to explain why it deserved an exemption. Prior to his April meeting with Prime Minister Abe, Trump suggested that the US might rejoin the TPP, from which he withdrew during the first week of his presidency, but that tease was subsequently crushed.

Trade Ministers from the TPP-11

Tit for tat with China

President Trump has been especially eager to remedy a trade deficit with China that he reckons to have reached $500 billion. As is discussed in the chapter on US-China relations, he announced the imposition of $60 billion in tariffs on Chinese goods, a move that Beijing matched with $50 billion in tariffs of its own on US exports. The US threw fuel on the fire when it announced that it was forbidding US companies from doing business with ZTE, a Chinese high-tech company, for seven years as a result of its failure to comply with a previous consent order imposed for violating an export ban on sales to Iran and North Korea. The Chinese government and its businesses viewed the US move as an attempt to throttle Chinese companies and used it to backstop the case for its indigenous technology development program, Made in China 2025. Attempts to halt the march toward an all-out trade war failed when a seven-person senior US delegation visited Beijing in early May for bilateral consultations on trade, but the two sides merely traded demands that given their sweep and scale could only be considered initial negotiating positions. As one of the US demands is the end of the Made in China 2025 initiative, prospects for progress are slim.

Fundamental contradictions

There are many reasons to object to the Trump administration’s economic strategy, but from our vantage point it contains two fatal contradictions, both of which undercut the core concern of Trump’s National Security Strategy, namely that the world has re-entered an era of “great power competition” between the United States, China, and Russia.

As a start, we note that while there is always a potential risk of a military confrontation, the real competition today is economic, which means that the principal “adversaries” are the US and China; Russia’s credibility as an international economic competitor is slim and diminishing. Yet US policies undermine its ability to compete with Beijing in this arena.

First, there is the emphasis on redressing bilateral trade imbalances. Even if this was a valid indicator of national economic strength – which it is not – the basic premise of the Trump policy is that the US must take money from its trade partners to end their “exploitation” of the United States and fix the nation’s economy. China’s message is just the opposite: The Belt and Road Initiative and the Asian Infrastructure Investment Bank both provide money to trade partners to meet their critical development needs. Even if the reality of the Chinese offers is quite different from what is presented, the contrast is inescapable, and the US will find itself struggling to increase its influence. The other Quad countries, led by Japan, have recognized the need to better compete with China in this area and are pursuing a “High Quality Infrastructure Initiative.” It isn’t clear, however, if they have the resources to compete with China’s largesse, especially if the US is focused on its own problems and prefers to devote resources to domestic concerns.

The second contradiction results from Washington’s readiness to pick trade fights with its allies while at the same time hoping to enlist them in a battle against China’s mercantilist and often predatory policies. There is an expanding consensus that the problems the Trump team has identified in Chinese policy and practice are real, must be addressed, and the current international trade order is not well suited to fix them. But even those who line up behind that diagnosis do not agree that the Trump administration’s remedy is correct. An indiscriminate policy that uses the same blunt tool – sanctions – against all trade partners antagonizes governments that would otherwise be ready to join US efforts to change Chinese behavior. Not only does it shatter the international consensus that will be essential to success in this endeavor, but it gives potential allies a reason to align with Beijing to counter a “rogue” US government ready to tear down the rules, norms, and institutions that have produced widespread prosperity since the end of World War II. In short, US actions allow it, rather than China, to be painted as the real threat to the international economic order.

Washington’s ability to rally support for all its international initiatives on trade or security is threatened by the Trump administration’s seeming disregard for the interests and views of its allies. As our reporting period closed, the US announced its withdrawal from the international effort to cap Iranian nuclear ambitions, a move that stunned European allies for its disdain (particularly after two European leaders trekked to Washington to plead their case). The commentary from European sources, in particular those who back strong ties with the US, has been scathing, with some openly questioning the future of US commitments to Europe. Asian allies and partners too are concerned, wondering what deals Trump is prepared to make with Pyongyang and Beijing as he works to “Make America Great Again.”