CFR's Michael Froman on trade conflict with China: There's a real train wreck coming here

Secretary of State Anthony Lincoln is meeting with Chinese officials in Shanghai today. He’s working on solving some key issues between the US and China that threaten the stability of both countries. Joining us right now is former U.S. trade Representative Michael Froman. Of course, now he is the president of the Council on Foreign Relations, and we welcome him to the table. So set set the table, if you will, for these discussions. How much influence and what kind of progress do you think that Anthony Blinken could even make as it relates to some of the economic issues, but also the issues that we’re seeing around the world as it relates to Iran and Russia? And what kind of pressure or leverage the Chinese will or will not have on any of these issues on our behalf? Well, I think Secretary Blinken and and the whole administration has to do whatever they can to put pressure on all these issues. We have to have a certain degree of humility over our capacity to influence Chinese behavior, particularly when it comes to economic, economic policy. China’s economy obviously is facing some tremendous headwinds. They’ve decided to go down the road of export LED growth precisely at a time when the international environment is going to close off markets to them. And so there’s a, there’s a real train wreck coming here where this is the next generation of trade conflict, whether it’s on E VS or other products that they’re building too many of for the US, for Europe, for China, for the rest of the world. Can I throw in TikTok because I imagine that’s going to come up in the discussion between them across across the waters. How do you think that changes the dynamic at all, if it does, meaning, meaning what the US is doing as it relates to TikTok, how the Chinese will view that, see that? And to the extent that that creates either more friction or not? Look, I think it probably complicates the conversation that Secretary of Lincoln wants to have with the Chinese about having the Chinese treat American companies better precisely at a time that Congress has acted against a specific American company. But I think the, the, the jury, so to speak, is still out on that. The law has passed. President Biden signed it. There’s likely to be litigation. And I think it’s very unclear at this point exactly how this is going to play out. But do you think the Chinese, when that happens, do the Chinese say to themselves those Americans, they’re terrible or do they say, ah, maybe we actually have to rethink how we do things? Like I think, yeah, no, I think it’s probably more the first I think they they sometimes they they, they try and dismiss it as election year activity. But this is broader than election year activity. I think whether it’s the protectionism on steel and aluminum, the concerns about electric vehicles or issues around Tick Tock, these are areas where there’s bipartisan consensus. It’s likely to be on the agenda for for some time. It’s been on the agenda for some time. And you know, for years we warned the Chinese that their tremendous growth was made possible by a benign international environment. That international environment became less benign, which it has. It was going to be much more difficult for them. And that’s precisely what has happened in terms of Iran, In terms of Russia, what does that conversation even look like? I think the US warns them very, in very strict terms about what they’re doing to support Russia’s effort against Ukraine and Russia’s effort to militarize its economy. Very early on in the Ukraine conflict, they made it clear they did not want to see lethal products crossing over from China into Russia. As far as I know, what China has done instead is boost the dual use products, which had allowed Russia to rebuild its economy into a militarized economy. We’ve got to run. But how direct are these conversations? I mean, obviously there’s one person on the other side of the table. The other are these friendly, Is it very unfriendly? Is there a tension in the, you’ve been in these rooms? I think this administration has made these conversations very direct. They’ve gotten to rid a lot of the process and sort of talking for the sake of talking. And instead there’s advance warning. They tell the Chinese we are going to impose tariffs. This is why we’re doing it. This is what they mean. We are going to raise concerns about your support for Russia and your and your partnership with Iran. I think it’s a very direct set of conversations. Michael from we want to thank you for helping us explain all of this. Thanks so much.