Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer recently engaged with Chinese Vice Premier He Lifeng and Commerce Minister Li Chenggang in Madrid. They unveiled a framework agreement regarding TikTok, the app that has captivated millions of American users. However, this development transcends TikTok. It signifies America’s strategy to leverage this app in a broader context of trade negotiations and national security concerns.
The core of the issue lies in data protection, algorithmic influence, and foreign ownership. As TikTok becomes a focal point, it embodies a critical turning point in negotiations with China. When I was part of President Donald Trump’s initial administration, we grappled with a variety of issues including trade imbalances and intellectual property theft. The landscape has shifted considerably since then, but the psychological tactics employed by China during negotiations remain constant.
In the spring of 2018, I found myself in Beijing, having prepared extensively for discussions aimed at reshaping the U.S.-China economic relationship. Our team included notable figures such as Secretary Steven Mnuchin and Under Secretary David Malpass. We were ready to present a comprehensive trade deal, attempting to address economic practices that had been detrimental to American interests.
Upon arriving at the U.S. Embassy in Beijing, I was confronted with a last-minute challenge: a lengthy proposal from the Chinese, entirely in Chinese and unexpected. I quickly assessed its content and communicated my assessment: “This is wholly unacceptable. This document doesn’t say anything – they’re just messing with us.” Tension rose as we debated our next steps, but we had little time to react as we were due at the meeting.
As we made our way to Diaoyutai, the state guesthouse, I was thrust into a crucial role. Mnuchin needed my assistance to understand the Chinese proposal. I found myself in the back seat, feverishly translating on the fly. This was a crucial moment, illustrating the bewildering nature of negotiations with China.
Upon entering the meeting, the atmosphere shifted. Mnuchin, unfazed, stated, “We received your draft. Thanks for sending it over – but we’re going to use our draft for today.” This bold response reflected the assertive stance Trump had advocated since taking office. What has transpired since is a shift in China’s tactics from sheer tariffs and theft towards controlling essential resource points like rare earth elements and semiconductors.
China now dominates the global market in rare earth mining, holding about 70% of the world’s production and a staggering 90% of its refining capacity. The implications are substantial. For instance, China holds a 61% share in global mining of rare earth magnet elements, underscoring its critical importance in technology and defense systems.
In 2023, the outlook for China’s semiconductor industry remains similarly competitive, soaring from an 8% market share in 2001 to 30% by 2016. This data represents not just numbers but active measures that China can employ during trade negotiations, particularly through export restrictions and manufacturing controls. The stakes are high, especially when reflecting on the implications of their trade practices and technological advancements.
Today, the challenges of trade have evolved, revealing a multifaceted struggle: significant trade deficits persist, the theft of intellectual property is increasingly sophisticated, and predatory financial practices threaten economic stability. TikTok captures media attention, but it also represents a strategic tool for the U.S. in newfound negotiations with China.
The recent meetings in Madrid and discussions following the Trump-Xi call signal an opportunity to reassess and reshape American strategy. The lessons from Trump’s first administration remain vital, advocating for a steadfast negotiating approach characterized by firm positions and defined red lines.
It’s crucial that these dialogues focus on substance rather than mere symbolism. The outcomes of these negotiations will have far-reaching implications not just for trade relations, but for the overarching context of national security and economic independence.
"*" indicates required fields
