Escalating US-China tensions are dangerous news for Asian stability

TOKYO- The expanding U.S. trade deficit with China is becoming a source of increasing tension between the two superpowers.

While China has been largely quiet on the matter, it has been busy building a broad new trade framework in the Asia-Pacific region, no doubt taking advantage of Trump’s pledge to pull the U.S. out of the Trans-Pacific Partnership free trade pact.

“President-elect Donald J. Trump today announced the formation of the White House National Trade Council,” said a statement issued by Trump’s transition team in late December.

The NTC, to be headed by Peter Navarro, a professor at the University of California, Irvine, will oversee U.S. trade policy.

The appointment of Navarro as director of the NTC is clear signal that Trump will be tough on China on trade issues.

The president-elect is irked by the record trade deficit the U.S. has built up with China.

Statistics from the International Trade Centre show that the deficit hit $386.4 billion in 2015, more than quadruple the figure in 2001, when China joined the World Trade Organization.

Let’s make a deal

Some analysts speculate that Trump is playing quid pro quo politics, the idea being that he will respect the One China policy in exchange for trade concessions. If the world’s second-largest economy further opens its market to American products or expands investment in the U.S., employment there would likely increase and he could take credit for it.

Trump’s transition team said in its statement that, “The National Trade Council will work collaboratively and synergistically with the National Security Council, the National Economic Council and the Domestic Policy Council.”

Trump may see the One China policy as a bargaining chip, but China views it as a core principle that it is willing to defend at all costs. A Chinese Foreign Ministry spokesperson said that if the U.S. ignores this fact, the healthy development of bilateral ties and cooperation in important areas are out of the question.

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