Trans-Pacific View

Washington’s Bungled Buenos Aires Summit

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Trans-Pacific View

Washington’s Bungled Buenos Aires Summit

Trump’s economic war against China is deeply corrosive for U.S. influence in bodies like the G-20.

Washington’s Bungled Buenos Aires Summit
Credit: Official White House photo by Shealah Craighead

It’s long been apparent that under the Trump administration the United States has become increasingly isolated. Even so, the just-concluded G-20 leaders’ summit in Buenos Aires, Argentina, underlined just how far U.S. policy has drifted from those of its partners, especially concerning China.

The summit got off to a poor start when the United States released a statement seeming to imply that Buenos Aires shared its fear of “predatory Chinese economic activity.” In fact, the Argentines see things very differently: China is the Latin American country’s largest creditor and biggest source of foreign investment, and during the summit China and Argentina signed agreements to increase trade in no fewer than 37 different sectors. It was no surprise that Argentina’s government rushed to distance itself from Washington, and clarify that it welcomes Chinese investment.

That was a warning sign of Washington’s waning influence in the G-20. Most of the commentary on U.S.–China relations around the G-20 has centered on the two countries’ apparent truce in their escalating trade war, which will see a freeze in planned tariff increases. This is indeed welcome news for a relationship that has, for the most part, careened from one provocation and escalation to another since President Donald Trump took office. And Trump administration officials will likely claim that their tough talk on China is part of a clever negotiating strategy that produced the apparent agreement between Presidents Trump and Xi to put trade tensions on ice.

But as usual, China is playing a longer game. The real story out of Buenos Aires is that while Washington wages grievance politics against the world’s second-largest economy, China is making an increasingly sophisticated pitch for leadership and influence throughout the G-20.

The extent to which China has made inroads in Latin America, a region long viewed as Washington’s backyard, is suggested by opinion polls showing that while 17 percent of Argentines have a negative view of Chinese President Xi Jinping, nearly 60 percent disapprove of Trump. Nor is Chinese influence in countries like Argentina limited to soft power. Units reportedly tied to the Chinese military operate a deep-space tracking station on land in the Andean mountains leased to Beijing by the Argentine government. At least some Argentine analysts, meanwhile, believe Chinese interests in Argentina center on access to critical sea lanes through the Strait of Magellan – but they are willing to trade such influence for investment capital. Such views are much more common across Latin America – and the rest of the G-20 – than Washington would like to admit. Apart from Argentina, China is the largest trading partner for Brazil, Chile, and Peru.

Under Trump, the United States appears to be in denial of these realities. U.S. officials have recently begun railing against China’s “debt diplomacy,” which they allege traps poor countries in the intergovernmental equivalent of predatory loans. Such warnings are not without some merit. But they ring hollow throughout much the developing world, where countries are happy to trade some degree of influence for cheap Chinese cash. Even in places like Malaysia, whose prime minister made a splash this past summer by criticizing China’s growing economic clout, the demand for investment from the world’s second-largest economy has hardly abated. The hard truth for Washington is that, for most of the G-20 and the rest of the world, there is little appetite to show Chinese investors the door.

Instead of trying to force countries like Argentina to sign on to Washington’s rabid protests of Chinese trade practices, the United States should counter Beijing’s influence by leveraging its still formidable soft power. Many countries do remain wary of the threat Chinese overseas development poses for their democracies, societies, and environments. Washington’s allies have grown increasingly alarmed at the prospect of covert Chinese political influence. Much of the backlash against China’s mammoth Belt and Road Initiative, meanwhile, has been generated by the environmental and social harms created by poorly designed megaprojects. In late August, a suicide bomber wounded three Chinese engineers in Pakistan’s Balochistan province in an attack that separatists claimed was intended “to warn China to vacate Balochistan and stop plundering its resources.” Countries are clamoring for U.S. leadership to hold China to account, both by countering its provocations in the political and military sphere, and by upholding standards to protect local populations and the environment.

Unfortunately, the best way to pursue these aims is through multilateral institutions, which the Trump administration has systematically undermined. Whatever the administration may think about the merits of the Paris Agreement on climate change, it remains the centerpiece of global sustainable development efforts, and is the natural platform on which to build efforts to make Chinese investment projects less harmful for people and the planet. But Washington was pointedly the only member of the G-20 not to sign a statement pledging support for the Agreement’s goals.

Trump needs to recognize that his economic war against China is not only quixotic, but deeply corrosive for American influence in bodies like the G-20. Rather than attempting to hijack multilateral bodies in service of its protectionist trade agenda, the administration needs to strengthen them to counter China where it can do so most effectively. At least for the moment, Washington can’t equal Beijing’s deep pockets when it comes to foreign investment. But even countries like Argentina that welcome Chinese investment will still back U.S. leadership that promotes its traditional values of democracy, peace through strength, and support for human rights.

Scott Moore is Director of the Penn Global China Program at the University of Pennsylvania and previously handled China policy at the U.S. Department of State and the World Bank.