South Carolina manufacturers and farmers have a big stake in next month’s trade talks between China and the United States and the final outcome of their trade war. Their hope is that tensions can be resolved, China’s temporary retaliatory tariffs on American goods will be lifted, and sales to China will surge.
But the ongoing unrest in Hong Kong, a separate source of tension between the United States and China, casts a troubling shadow over relations between the two nations. That shadow could undermine hopes for a trade deal.
The problem is intensified by the massing of Chinese troops on Hong Kong’s borders where they carry out intervention drills. An intervention would draw worldwide condemnation and effectively end any chance of a near-term settlement of the trade dispute. A peaceful resolution is desperately needed.
It is too soon to know whether President Donald Trump’s decision to comment Wednesday on what he has called, in a technically correct phrase, a Chinese “internal matter” will lead to a desirable resolution of the crisis. But he was right to add his voice to the conversation.
In two tweets Wednesday, amplified on Thursday, Mr. Trump said “Hong Kong is not helping” to resolve trade differences, adding, “China wants to make a (trade) deal, but let them work humanely with Hong Kong first.”
Hong Kong is technically a separate administrative district of the People’s Republic of China. But under a treaty with the United Kingdom that returned Hong Kong to Chinese rule in 1997, Hong Kong is entitled to a separate political system until 2047. That makes it an outpost of democracy in China that most Americans value.
Unfortunately, the government of Hong Kong has been carefully rigged by Beijing to deny a democratic voice to Hong Kong citizens. This year, China’s handpicked Chief Executive Carrie Lam proposed a law to allow Beijing to ask Hong Kong courts to extradite individuals charged with violating China’s stringent laws against political dissent. Her act triggered massive protests generally supported by Hong Kong’s business community, which fears the erosion of Hong Kong’s independent legal system.
There could be further economic losses for Americans if the United States and China fail to resolve trade disputes. For example, according to The Washington Post, U.S. soybean farmers (soybeans are a major South Carolina crop) lost $7.3 billion in sales between 2018 and 2019, depressing prices for soybean farmers around the nation.
The South Carolina automobile industry has been hurt, but so far has escaped major damage because China temporarily rescinded an extra 25% tariff on American exports. But if trade tensions worsen, that tariff could be restored.
The Port of Charleston in the first six months of 2019 handled (both import and – very largely – export) 16% fewer automobiles than in the same period last year. This may reflect a general slowdown in the world economy as well as Chinese tariffs. But the slowdown in world economic activity also owes something to the U.S.-China tariff war.
At the same time, most Americans support Hong Kong’s democrats, if not their violent fringe. The best way out of this conflict would be, as Mr. Trump suggests, a “humane” settlement of the crisis.
Chinese President Xi Jinping is unlikely to take up Mr. Trump’s suggestion for a face-to-face meeting with the protesters. But signs are that the protesters want to turn down the flame and keep the support of the Hong Kong business community. A similar de-escalation and readiness by the Hong Kong chief executive to cancel the proposed legal changes could lead to a peaceful resolution. But President Xi has to bless this outcome. Mr. Trump is right to ask him to act.
— The Post and Courier