In our last post in this series, we focused on China. Now it’s time for the US to get some bruises.
The US does a painfully poor job of negotiating with the Chinese Communist Party (CCP). This is an odd gap since, generally speaking, US diplomacy is far more effective than PRC diplomacy. Yet when directed at the CCP, American diplomatic efforts fall apart.
This is a catastrophic weakness. Washington seeks to manage the relationship with Beijing without conflict. Yet 1) Beijing will not negotiate in good faith and 2) Washington cannot effectively negotiate with the CCP to get things it wants.
If Washington cannot gain concessions from the CCP through diplomacy, it must resort to military or economic levers.
It is amazing that few observers, especially those who wish to engage with the CCP, identify this major problem at the heart of the relationship.
Rarely before has a superpower like the US had such a terrible track record of negotiating with an adversary, AND the lack of awareness to recognize it.
Truth #1: Washington cannot negotiate with the CCP like it negotiates with other nations.
This does not mean that Washington should forego diplomacy and negotiation. It means that these actions must be handled with greater skill.
The beliefs players in negotiations have about the world, their counterparts, and appropriate end goals influence the negotiations themselves. This sounds obvious, but American presidents and negotiators don’t get it.
The beliefs the CCP brings to the table are unique and dangerous. The party has defined the US as an existential threat to be overcome. The party believes that after a long, painful, arduous road of suffering, they will eventually defeat the US. The party has an extremely realist view of international relations, focusing on hard power, coercion, geography, and mercantilism.
The CCP is not a country, a nation, or a polity. It is an extremist political party. The CCP does not negotiate to reach mutually beneficial deals. It negotiates to buy time, test and confuse the enemy, obscure goals, gain advantages for the party, and misdirect.
This leads to numerous (but obvious) traps US negotiators fall into with their communist counterparts.
Timelines
The US has an electoral system, and US leaders often want to reach a deal before a domestic election or political event. From the perspective of the communists, this is an absolute gift. There can be no short, sharp negotiations with the CCP that deliver results, especially in the context of a US negotiation team that has a deadline. The CCP will simply use that deadline to strangle their counterparts. Every. Single. Time.
If negotiations are to proceed, Washington must have no deadlines and be willing to impose severe and painful consequences when the CCP drags its feet.
Concessions
The US should avoid at all costs making material concessions on important issues to the CCP unless the party offers serious tangible concessions and verification measures are put into effect. The US has made major non-reciprocal concessions time and time again in the hopes that the CCP will change their hearts.
There are at least nine unbelievably major concessions the US has offered to the CCP since 1980.
1) 1981-1989 sales of military equipment to the PLA.
2) The soft response to Tiananmen 1989.
3) Nearly unlimited access to the US economic market.
4) Access to listing PRC companies on US stock exchanges.
5) Support for PRC’s WTO accession.
6) Accepting the PRC’s tariff and non-tariff barriers against the US while not retaliating until 2019.
7) Nearly unlimited access to seats at US universities.
8) Self-imposed US limitations on Washington’s relationship with Taipei.
9) Continued US willingness to sell the PRC enterprise software.
Promises
The CCP will always seek to gain real concessions in exchange for promises they never intend to keep. Prosperous America maintains a good list of broken promises included in our list below:
2000: The CCP promised to lower tariffs, eliminate non-tariff barriers, protect intellectual property rights, and open its markets to US goods and services as part of its World Trade Organization (WTO) accession. Twenty years on, there have been no attempts to change this.
2014: The CCP committed to exchange rate liberalization in rounds of talks with the US. This would allow for foreign market forces to determine the value of the renminbi. More than a decade on, this has never occurred.
2014: In the same rounds of talks as above, the CCP promised to establish mechanisms that prevent the expansion of PRC crude steelmaking capacity. This never occurred.
2015: General Secretary Xi Jinping promised to President Barrack Obama during a White House Rose Garden press conference that he had no intention of militarizing the South China Sea. This was a bold faced lie.
2015: General Secretary Xi Jinping signed an agreement with President Barack Obama to prevent cyber-enabled theft of IP. The CCP never intended to hold its side of the bargain.
2019: As part of the Trump Phase 1 trade deal, the CCP agreed to import more manufactured goods from the US, including steel, aircraft, and cars. This never occurred.
2019: The CCP reneged on its commitment to maintain Hong Kong’s status as part of the 1997 agreement with the United Kingdom by cracking down and changing the administration and laws of the semi-independent enclave.
2019: The CCP agreed to curtail the flow of fentanyl to the US as part of the Trump trade deal. This never occured.
2022: CCP and US reached a deal to establish inspections and audit firms in mainland China and Hong Kong that audit PRC companies listed on US exchanges. The US has since sent delegations to the PRC to discuss implementation of the deal with no real results.
2023: The CCP agrees to curtail the flow of fentanyl to the US as part of talks with the Biden administration. This never occurred.
The Record is Clear
For decades, the US has offered major concessions and thrown lifelines the communist government in Beijing. Perhaps during the Cold War, there was some logic to this approach, but that time is long past.
In turn, the CCP consistently lies, cheats, steals, and spits in America’s face. And Washington thanks them for it. There may not be a single major deal or promise that Beijing has kept since 2000.
Looking over this track record, why would you change anything if you were Xi Jinping? You would continue to not follow through on any promises while demanding the US gives you concessions during negotiations.
Truth #2: The CCP is Irredeemable
The CCP is one of the most violent and repressive great powers in modern history. The early Anti-Rightist Campaigns, the Great Leap Forward, the Great Proletarian Cultural Revolution, the Tiananmen Square Massacre, and the ongoing repression against Uighers, Tibetans, the religious, and everyday PRC citizens make the crimes of the Soviet Union seem small in comparison. Please read a serious book about any one of these topics. It will change your life.
These crimes cannot be taken back, redeemed, or changed. These crimes are not a bug, but a feature of how the CCP must operate. These crimes form the dense, hateful nucleus of the CCP’s greatest weakness and must be fully exploited to Washington’s advantage.
There is no reforming the CCP or working together on long-term goals. The party either persists or collapses.
The Trump-Xi Agreement
On 1 Nov, the White House announced the outline of an initial agreement with the CCP, which includes the following:
1) Halt the flow of precursors used to make fentanyl into the United States.
The CCP sees shipping fentanyl to the US (and introducing a variety of other drugs, including tianeptine, xylazine, 7-OH, and others) as an extremely effective tactic to kill Americans, disband families, destroy social cohesion, and put pressure on US state and federal budgets.
The CCP accrues massive benefits by attacking Americans with drugs. There is no reason for the party to stop this tactic unless the US imposes severe retaliatory consequences.
2) Effectively eliminate China’s current and proposed export controls on rare earth elements and other critical minerals.
Based on other articles, this is likely only a one year pause. The CCP is creating new departments within the PRC to control and license the export of processed rare earths. Since it seems like the CCP's threat to limit processed rare earths worked during this round of negotiations, expect Xi to use this play more often.
With the licensing regime, the CCP is creating the internal tools to wield this weapon again. Washington has been on a spree of signing rare earths deals with Australia, Malaysia, Cambodia, and Japan. The CCP knows its ability to corner the rare earths processing market is coming to an end - another reason for Beijing to use the leverage while it still exists.
3) End Chinese retaliation against U.S. semiconductor manufacturers and other major U.S. companies.
The CCP wants high end US chips, but it will never end retaliation against US semiconductor manufacturers or other major US companies. There will be no rollback of barriers against US entry into the PRC market.
4) Open China’s market to U.S. soybeans and other agricultural exports.
This is simply a small step to return to the status quo. In the 2016 / 2017 timeframe, the PRC purchased more than half of the US soybean crop. Washington should not expect a return to this level of activity, as Beijing has sought to diversify its purchases across different countries, including Brazil.
The Trump administration’s framework for an initial deal with the CCP will not solve any fundamental issues, nor is it likely to make any tactical advances for the US.
Referring to the White House memo, the US concessions are concrete and time-bound. The CCP concessions are vague and not bound by specific times and actions.
Conclusion
If Washington desires to negotiate with the CCP, it must start from understanding how communists negotiate. The classic 1985 Rand study on Chinese negotiating behavior is as valid today as it was in the 1980s, yet it seems like American negotiators have never read it.
To gain real concessions from the CCP requires the US to truly wage a trade war. The US will have to accept some pain while applying serious consequences to the CCP, including touching pain points on Taiwan, PRC domestic stability, and structural trade weakness in areas like energy and food.
The Trump administration did the opposite in this round of talks, specifically by snubbing Taiwan President William Lai’s visit and downplaying the relationship with Taipei. From the US perspective, the talks were dead in the water before they began.