How U.S. populism and nationalism affect U.S.-China trade relations

Abstract for graduate thesis

This paper addresses how populism and nationalism affect the US’s China policy and accounts for the relationship between changing corporate interests and a shifting model for US-China trade relations. The paper recognizes two contradictions: the first is Trump’s working class rhetoric yet corporate support and policy that benefits the elite; the second is how US corporate interests align with tariffs placed on Chinese goods. By highlighting how US corporate interests drive domestic and foreign policy, the paper builds a collective action framework to explain the use of nationalist narratives in framing populist campaigns to resolve contradiction one. This paper further looks at two trade shock case studies to resolve contradiction two: by testing the correlation between anti-Chinese rhetoric, its resulting protectionist policy, and US-China trade outcomes between 2016-2020.

While globalization has objectively exacerbated income inequality in the US and spurred domestic discontent, voters can either actively frame their socioeconomic issues and pursue policy change (bottom-up collective action) or passively depend on a politician to frame the issues and direct blame (top-down collective action). This model reflects how politicians obscure the corporate interests that still govern domestic affairs by using nationalist narratives and top-down collective action-led populism. However, there remains the question of whether US corporate interests truly drive US-China trade relations, as the Trump administration’s protectionism appears to go against the laissez-faire and liberal economics that corporations have preferred. As such, this paper explores whether the US-China trade war has substantively altered bilateral trade volumes and structures. Between 2016 and 2020, trade volume remained relatively unchanged from the pre-trade war era, though the pandemic lowered bilateral trade volume briefly. However, when we look at US imports from China as a proportion of total US imports, we see a significant drop in relative trade between the nations.

In light of this contradiction, this paper posits that the dominant corporate interests in the US have shifted since 2016—both in response to China’s non-Western, self-sufficient economic policy and due to the manufacturing businesses that are closer to Trump. Ultimately, US corporate interests may change over time, but they continue to drive the US’s China policy. While tariffs have affected the proportional dependence of the US on Chinese imports, the increasing trade volume suggests that despite rising US nationalism and populist campaigns, economic decoupling is not on the horizon.

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