Following President Trump’s call to China’s President Xi Jinping on February 9, it appeared that U.S.-China tensions, particularly over U.S. policy vis-à-vis Taiwan, had abated for the time being. Trump reaffirmed the U.S. “One China Policy” during the call, and Beijing celebrated that they were able to get Trump back on track on this issue of “core interest” to China (specifically after Taiwan President Tsai’s call to Trump before his inauguration and Trump’s subsequent tweet raising questions about the “One China Policy”).  Some Chinese analysts even noted rising anxieties in Taiwan about a general perception that Trump may in fact have been using Taiwan as a “bargaining chip” and is now willing and ready to deal with China more broadly on a range of bilateral issues to “strike a grand bargain.”

This celebration may be premature, however, as Trump had simply reiterated the longstanding U.S. policy of support for the status quo that calls for the “peaceful resolution” of cross-Strait relations but still leaves open the question about Taiwan’s future political status. Secretary of State Tillerson had elaborated on this U.S. position in written testimony to Congress earlier by not only affirming the U.S. “One China Policy” but also the Taiwan Relations Act (TRA) that commits the United States “to enable Taiwan to maintain a sufficient self-defense capability.”  In fact, he went further to affirm President Reagan’s “Six Assurances” that the United States would not revise the TRA nor exert pressure on Taiwan to negotiate with Beijing.

More generally, Secretary of Defense Mattis’ first trip abroad to Korea and Japan in early February strongly reaffirmed U.S. commitment to its allies in Northeast Asia. Japanese Prime Minister Abe also underscored the strength of U.S.-Japan’s “unshakable” alliance during his subsequent visit to the United States.  In their Joint Statement, Trump and Abe even affirmed that the U.S.-Japan Security Treaty “covers the Senkaku Islands” (contested by China and Japan) and that they “oppose any unilateral action that seeks to undermine Japan’s administration of these islands.”  So, even putting aside the many difficult bilateral trade issues that remain to be addressed, it appears that U.S.-China relations will remain contentious for some time to come.

More recently, North Korea’s launching of four ballistic missiles into the Sea of Japan on March 6 has produced an even more urgent and potentially more dangerous crisis in the region. According to news reports, three of these missiles landed within Japan’s 200 nautical mile exclusive economic zone.  Just prior to this, during Abe’s visit to the United States, North Korea had test-fired a new type of solid fuel intermediate-range ballistic missile that also landed in the Sea of Japan.  Given that North Korea is now expected to achieve the goal of completing its nuclear development by the end of the year, its successful testing of these nuclear capable missiles poses a near-term existential threat to both South Korea and Japan.  Moreover, North Korea has clearly indicated its intention to target U.S. military bases in these countries as well as to develop an inter-continental ballistic missile (ICBM) nuclear capability that will directly threaten the U.S. mainland.

The urgency of this looming crisis has also sharply exacerbated the fundamental differences between China and the United States in how to address the North Korean nuclear threat. Beijing continues to argue that Washington needs to accommodate the North Korean demand that the United States cease its joint military exercises with South Korea, reduce and remove its military presence in South Korea and eventually negotiate a permanent peace treaty with North Korea in order to be able to persuade Pyongyang to freeze and eventually halt its nuclear development program.  This would allow China to continue managing its relationship with North Korea while simultaneously advancing its own long-term goal of preventing the nuclearization of the Korean peninsula as well as reducing U.S. military presence in South Korea and the region as a whole.

The U.S. response has been precisely the opposite, however, arguing that North Korea cannot be trusted to relinquish its nuclear weapons and that China should support and comply with international efforts to increase pressure on North Korea to freeze its nuclear development by imposing even stronger economic sanctions on North Korea. Meanwhile, the United States argues it has no choice but to start the deployment of Terminal High Altitude Area Defense (THAAD) systems in South Korea to defend against potential missile attacks from the north.  This has alarmed the Chinese who warn that the deployment of these defensive weapons destabilizes the strategic balance and would require Beijing to respond in some form that will result in an arms race between China and the United States in the region.  Meanwhile, the United States and South Korea have continued their ongoing two-month military exercise (“Foal Eagle”) and may ultimately be compelled to consider the possibility of undertaking a first strike against North Korean nuclear and ballistic missiles facilities as the crisis escalates.

So the stakes and the risks are very high on the Korean peninsula at this time. As Tillerson prepares for his upcoming trip to Japan, Korea as well as China at the end of the week, Beijing and Washington face a dangerous quandary on how we should work together to confront the North Korean nuclear threat.  As Mattis announced during his recent visit, the United States is moving ahead quickly to complete the deployment of THAAD missiles in South Korea.  While the recent removal of South Korean President Park Guen-hye from office and upcoming elections may delay and perhaps even eventually halt deployment, the United States will almost certainly seek to deploy these missiles elsewhere in the region, probably in Japan, given the dire threat to U.S. forces and civilians in the region.

At the same time, the United States will likely be pushing for even stronger UN-mandated economic sanctions that may include seizure of North Korean assets abroad and debilitating trade prohibitions against North Korea that will essentially threaten its economic and possibly even regime survival. Such measures will require Chinese cooperation since China and Chinese companies continue to serve as North Korea’s primary economic lifeline and financial conduit to the world.  Beijing, however, is likely to continue resisting these measures and to press for concessions by the United States and its allies to get North Korea back to the negotiating table.

At this point, it is very difficult to envision how Beijing and Washington, along with the other members of the “Six Party Talks,” will be able to arrive at an agreement to address this issue. Nonetheless, it is critical that the United States and China, despite the diversion of domestic politics, focus on developing a solution to this looming crisis at the highest levels.  The upcoming summit between Xi and Trump in Mar-a-Lago in April will offer such an opportunity.  Failure to do so could be costly.