The Trump administration plans to use ongoing tariff negotiations to pressure U.S. trading partners to limit their dealings with China, according to people with knowledge of the conversations.
The idea is to extract commitments from U.S. trading partners to isolate China’s economy in exchange for reductions in trade and tariff barriers imposed by the White House. U.S. officials plan to use negotiations with more than 70 nations to ask them to disallow China from shipping goods through their countries, prevent Chinese firms from locating in their territories to avoid U.S. tariffs, and not absorb China’s cheap industrial goods into their economies.
These measures are meant to put a dent in China’s already rickety economy and force Beijing to the negotiating table with less leverage ahead of potential talks between Trump and Chinese President Xi Jinping. The exact demands could vary widely by nation, given their degree of involvement with the Chinese economy.
China’s strategy of growing its economic power and influence depends on a river of money with its headwaters in the United States. And its ability to make deals in countries not hostile to the United States is only possible because the US tolerates its moves and is committed to using only modest soft power to oppose the moves.
Donald Trump is not in a mood to tolerate expanding Chinese influence. Look at the Panama Canal port deals. Trump’s goal is not so much to own the canal as to deny China influence in the region. China, not Panama, is the target.
In fact, most of Trump’s seemingly bizarre foreign policy moves–Canada as the 51st state and annexing Greenland are about trying to change the political geography to keep China from gaining influence in the Arctic.
The flow of information out of China on economic performance since the tariffs hit is sparse, but I have been checking in on the social media chatter coming out of China, and the news is bleak. Consumer spending is down, export products are being sold at firesale prices, and business owners are locking doors and leaving employees unpaid. This is all chatter right now, but also likely true.
Trade wars suck for everybody involved, and when the cost of Chinese-made products go up there will be some pain here in the United States, whatever Trump and his people say.
But none of this pain will be an existential threat to Trump, the country, or the Republican Party. There will be a price to pay, but it will be modest in the longer term.
Not so for China. Their regime is under threat because their hand is much, much weaker. Weaker than Trump’s and weaker than people think.
Of course, if China were a normal country, what Trump is doing would be a horrible policy. Generally speaking, destroying a trading partner’s economy is both morally questionable and terrible for business. Normally you would cut a deal.
But China and the United States are heading for a war, and a big one at that. Xi Jinping has made that abundantly clear, and he has counted on making the US economy dependent on China to keep us cowed.
Trump is turning that logic on its head.
Gavin Bade and Brian Schwartz