By Chen Dinding    Source: The Diplomat    Published: 2018-11-10

The highly anticipated U.S. midterm elections are finally through. Although some votes are still being counted or recounted, the main result seems to be clear: the opposition Democratic Party has regained the control of the House while the Republican Party retains its majority in the Senate. This result was consistent with many of the pre-election polls and thus did not surprise most observers. While it is interesting to see how this result will affect U.S. domestic politics and upcoming 2020 presidential elections, it is more interesting to examine how the China-U.S. relationship might evolve in the remaining two years of the Trump administration’s current term.

Three possible scenarios exist for Sino-U.S. relations in the coming two years, and they include: 1) more or less a continuation of the status quo, 2) more deterioration, and 3) mild improvement. Although in theory any of the three scenarios are equally likely to happen, there is more evidence that the third scenario will be the most likely outcome for three main reasons. Most importantly, there are domestic reasons for Sino-U.S. relations to improve, at least somewhat, in the coming years.

For the U.S. side, because of the election results, the Trump administration, particularly President Donald J. Trump, will face enormous pressures when it comes to the domestic political agenda. It is even possible that Trump might face impeachment in the coming years, thus putting him essentially in a lame duck situation.

Also, with the Democrats controlling the House, any major legislative moves put forward by the Republican Party will face great resistance, thus making any major policy reform very difficult if not totally impossible. This means that for Trump in 2019 and 2020, there will be no major political victories to claim, as he did in 2017 and 2018. This will be big trouble for Trump if he intends to get re-elected in 2020. The midterm elections already show that voters are unhappy with his toxic domestic agenda and if that trend continues and strengthens, then Trump might lose the 2020 election.

Against the backdrop of future domestic impasse, Trump would need to find some foreign affairs victories to claim he can truly “make America great again.” Where can he find some possible victories? Possible issues include North Korea, Iran, the World Trade Organization, trade, China, and the Middle East. If Trump gets into big trouble in any of the above issues, then in 2020 his chance of winning re-election will be very small.

Among the issues, Sino-U.S. relations will be of the greatest importance because of China’s strong impact on the U.S. economy and global order. Trump’s current China policy, if there is any, is headed in the wrong direction. Instead of seeking common ground for cooperation, Trump has chosen to fight a trade war with China due to his own misperceptions of trade and poor policy suggestions from his small circle of advisers. Recent economic and trade statistics are already showing that the trade war is hurting both the U.S. and Chinese economies, as expected by almost all economists and sensible politicians.

If the current trade war between the United States and China deepens into next year, it is to be expected that the U.S. economy will suffer, and U.S. consumers will suffer particularly. With a weak economy and upset consumers, Trump will definitely suffer in the 2020 elections. So Trump, if he acts in a rational way, must find a solution to stop or at least ameliorate the trade war with China. This would be a wise political logic for Trump, because his number one priority should be winning re-election in 2020, not the trade war with China.

On the other hand, the Chinese government has maintained a rational and mature approach to the trade war. China’s attitude has been very clear from the onset: it will play the trade war game, but won’t deepen and escalate it. Also, this year marks the 40 years anniversary of China’s reforming and opening movement, which laid the solid foundation for China’s economic and social successes in the past 40 years. China is willing to continue this approach with more opening and more reforms, which is evidenced by the recent China International Import Expo in Shanghai. And Chinese President Xi Jinping and Trump will meet again at the G20 summit in Argentina later this month to discuss possible deals to end the trade war.

To conclude, there are motives from both the United States and China to improve their relations, particularly trade relations, in the coming months. This would be a good result for both powers, even though long term strategic competition between them would continue. As long as both powers and their leaders make rational choices, Sino-U.S. relations will remain solid and mature, despite periodic tensions that are normal for great power relations.

Chen Dingding is a visiting fellow of Chongyang Institute for Financial Studies at Renmin University of China.