“We need each other, theU.S. and China. China needs us. We need themand they know that.”
— Max Baucus, former U.S. ambassador to China and former U.S. senator
It might have been Donald Trump’s insistence that climate change was a Chinese hoax, or that the U.S. had become the communist state’s piggy bank to rebuild the Middle Kingdom.
Whatever the inflammatory remark was, the Chinese began asking questions about Donald Trump early in the election season. And when they did, they often directed those questions to former U.S. Ambassador to China Max Baucus, who would say that like the Chinese, he wasn’t really sure who The Donald truly was. Now that he’s back in the U.S., the native Montanan still isn’t sure.
“They asked me a lot of questions, ‘Who is this guy Trump?’ And my answer was, ‘I’m as flummoxed as you are. It’s hard for me to know,’” Baucus told The Gazette last week.
Living in Beijing since early 2014, Baucus had missed the rise of Trump, from the real estate mogul’s fateful June 2015 ride down the escalator of Trump Tower to announce his candidacy as “Rocking in the Free World” blared over speakers, to Trump’s political cage match victory over 16 Republican primary opponents.
Trump’s defeat of Hillary Clinton left Democrats slack-jawed and had a similar effect on the Chinese. Former President Barack Obama had visited Beijing the September before the election and told his hosts Hillary Clinton was the likely victor.
“I found that during the time I was there, they became very sophisticated about the U.S. political system and asked a lot of good questions. The questions they asked, the early ones were ‘Gee, will he really impose a 45 percent tariff? Will he really name China a currency manipulator?’ And my answer to all that was, ‘Gee, I don’t know. I highly doubt there will be a 45 percent tariff. That doesn’t make any sense whatsoever. Currency manipulation maybe, but that’s problematic because the Chinese currency is going down in value, not up.’”
China has invested $1 trillion in foreign currencies to keep its own money from depreciating further and destabilizing its economy, Baucus said.
But Baucus told the Chinese that U.S.-China relationships were going to be more difficult because many Americans blamed trade agreements for lost jobs. And trade with China, although the nations don’t have an agreement, was a primary cause.
“They knew that. They knew tensions were going to be worse, but my next suggestion to them was ‘Do something positive. Take the initiative on trade or similar matters to show that you can work with this administration,” Baucus said. “And they said, ‘What should we do?’ and I said ‘First of all, take American beef,’ and they laughed. I said, ‘Something like that to show that you care, to diffuse some of this anti-China rhetoric you’re going to see.’”
Back in the United States for less than two weeks, Baucus is still doing what he can to help a U.S.-China relationship he has for decades considered vital. Friday, he was flying to Iowa to meet with Republican Gov. Terry Branstad, President Donald Trump’s pick for U.S. Ambassador to China. Branstad has reportedly developed a relationship with Chinese President Xi Jinping, who has visited Iowa several times.
“We need each other, the U.S. and China. China needs us. We need them and they know that,” Baucus said. “They value stability so much. They don’t want the boat rocked. Maybe a little ripple, that’s fine, maybe a little choppy sea, that’s OK — but no storm.”
No country trades more goods with the United States than China. The countries traded $659.4 billion in goods in 2015, according to the U.S. Trade Representative. But the United States sent $161.6 billion in goods to China in 2015, while receiving $497.8 billion. That lopsided exchange, $336 billion in China’s favor, has been a major sticking point for decades, even though only two nations receive more U.S. goods than China.
As Montana’s senator for 36 years, Baucus was the longest sitting member of the Senate Finance Committee, which handles trade issues. In that role Baucus had a role in the U.S.-China Bilateral Investment Treaty, which sets the rules for U.S. investment in China and vice versa.
Filling the void
He took the Senate lead on the Trans Pacific Partnership, a 12-nation trade agreement not including China that was to cement the United States as the key economic force in the Asian Pacific.
President Trump announced this week that the United States would withdraw from TPP. Baucus said China will quickly fill the void left by the United States’ exit. Empty spaces fill quickly in China, Baucus said, on the train, at the dinner table, on a crowded street. In a country with 1.3 billion people hungry for a better life, taking what’s available is a mindset, Baucus said, and that mindset extends to economic policy, as well.
In the Senate, Baucus played a role in U.S. policy toward China at least since the 1980s when Congress launched a raft of bills to turn back a $150 billion trade deficit. Baucus faulted President Ronald Reagan for lacking a trade policy. As a result, Baucus said at the time that “virtually every American industry is going down the drain.”
By 1989, Baucus was chairman on the Senate subcommittee on international trade and backing President George H.W. Bush’s efforts to investigate unfair trade practices concerning intellectual property rights in several countries, including China.
But Baucus also championed preserving most favored nation trade benefits for China, crafting a plan in the early 1990s that granted the status, while also requiring action on other fronts.
From that point on, Baucus repeatedly circled back during his tenure to address piracy of patented intellectual property by the Chinese.
Baucus helped secure permanent normal trading relations for China, a necessary step before China could enter the World Trade Organization.
Back in Montana
In some way, still being roughed out, Baucus plans to work from the private sector on U.S. Relations with China. He’s developing a “Baucus Institute” at the University of Montana Law School, which will surely have a China component, he said.
Baucus and his wife, Melodee Hanes, are back in Montana after nearly three years at the Chinese embassy in Beijing.
They live in a guesthouse northwest of Bozeman on a small acreage the couple bought shortly before Baucus left the Senate after nearly 36 years. The couple planned to build a larger home on the property, but shelved the blueprints after President Barack Obama nominated Baucus for U.S. ambassador to China in 2014.
It’s a nice neighborhood, not far away from the driveway of U.S. Sen. Steve Daines, the Republican who now occupies the Senate seat Baucus vacated.
Friday morning the views from the Baucus’s home were brilliant. The now-capped Bridger Mountains towered in the east, the white tips of the Tobacco Roots were in sharp focus some 30 miles to the west.
“I see the Spanish Peaks. I couldn’t be better. It’s the icing on the cake. I can go outside and run now,” Baucus said.
An avid marathoner, Baucus rarely ran outside in Beijing because of poor air quality. He tried his luck at a half marathon shortly after arriving in China, but walked away from the starting line because of the pollution.
In 2013, when news broke of Baucus’s nomination, China Digital Times reported that the Chinese, stricken by Baucus’ age and Beijing’s notoriously bad air quality, nicknamed him Ambassador “Bao Kesi,” loosely translated as “coughs to death.” His predecessors at the U.S. embassy each lasted less than two years. Baucus lasted nearly three and left believing he still had a role to play in U.S.-China relations.
“I’ll always have some connection, some significant involvement with China, because it’s so interesting and I care about the relationship so much,” Baucus said. “That’s why I’m going to see Branstad, because I care. I don’t care that he’s a Republican. I want to help the relationship.”