News Analysis
President Donald Trump has focused much attention on the Chinese administration as mutual tariffs on US trading partners are set to take effect Wednesday.
Several experts say that after many world leaders finally met us and the first kick and shouting, Xi Jinping, the leader of the Chinese Communist Party (CCP), will not do so even with the added ultimatum.
“XI sold himself domestically and internationally as a man standing in America. Anyone who wants to stand against America should line up behind XI’s Chair,” Christopher Barding, a senior fellow at the Henry Jackson Association, a UK-based think tank, told the Epoch Times.
“It’s devastating that XI is seen as opening a cave to Trump in any way,” he said.
Experts also said the CCP cannot and does not provide what it wants to the US.
According to Yeh Yao-Yuan, a professor of international studies at St. Thomas University in Houston, the current US-China tariff standoffs are more than trade disputes.
“It’s a more aggressive separation as the escalation of tariffs further reduces bilateral trade,” Yeh told the Epoch Times. “Continued decoupling leads to a cold war.”
Chinese expert Alexander Liao believes the current situation will ultimately become a contest between Trump and Xi. Trump relies on the power of the US economy, while XI relies on support from the strict control system of the communist regime.
Given this, Liao said Xi is at a disadvantage because there is little room for policy to manipulate.
“There are a lot of cards in Washington, and very few in Beijing,” he told the Epoch Times.
All roads lead to China
When he announced mutual tariffs at Washington’s Rose Garden on April 2nd, Trump posted a list of the nation.
While China was at the top of the list, it had not received the highest rate. Other Southeast Asian countries that Chinese companies use for transshipping, including Vietnam and Cambodia, received almost 50% of the collection.
But Balding said China is the real target of the administration.
“They want to be more aggressive towards China, but they want to do it very quietly,” he said.
“They did almost that to protect China,” he added. It mentioned the administration’s approach to announcing drastic global tariffs so that collections on Chinese goods aren’t as prominent.
Balding pointed out that Trump would apply tariffs to other countries more differently than China. For US tariffs on other countries, fees are set to facilitate negotiations. However, Football said negotiations would be extremely difficult for Beijing because the tariffs imposed on China are so high.
Three countries were accepted: 25% early fentanyl tariffs in Canada, Mexico and China.
Two North American countries were exempt from mutual tariffs last week. The White House said Canada and Mexico will remain in the fentanyl tariff regime and will move to a mutual tariff regime after reaching a bilateral agreement with the US.
In comparison, China received mutual collection in addition to fentanyl tariffs. Most imports in China are currently subject to taxes of over 60%. The amount Trump said on the campaign trail.
According to Balding, such sudden tariffs at the start of negotiations make it very difficult for XI to reach any transaction. He said the Chinese leader must make many concessions to the US to cut interest rates by half. Even if that happened, the other half would be too expensive for China to stand.
“What does Trump want? It seems he’s basically saying, ‘Let’s cut everything out of China as much as possible,'” the expert said.
Since Trump returned to the White House, much of his foreign policy has been promoted directly and indirectly by China.
“Essentially (Trump) said, ‘No part of the world can be a place where China or other countries can pass through them,” Rutnick said.
Secretary of State Marco Rubio visited Panama as part of his first official foreign trip. Shortly afterwards, Panama said it would not renew its agreement with China’s Belt and Road Initiative, a geopolitical platform for CCP to expand its global impact.
Lessons learned
The Trump administration has been learning from its first term and now deals with China differently, experts said.
During his first administration, it took Trump two years to negotiate and sign a “Phase 1” trade deal with China. Ultimately, Beijing failed to fulfill its pledge to purchase another $200 billion in US products in two years.
Riao said the CCP’s strategy is to pull things out. For example, it could take two years to reach an agreement and another year for Washington to discover that Beijing hasn’t gotten better about its promise.
Under this cycle, the US will bear the cost of such delays.
This time, by imposing tariffs in advance, Trump quickly spent XI on charges, Liao said.
balding agrees.
“If you want to pull this out for years or years, go ahead,” Balding explained Trump’s approach, saying. “We’re going to inflict a huge amount of pain very early on, so if you want to pull it out, you’ll pull out your pain.”
The US trade deficit with China was around $300 billion last year. This means that the negative impact of the 34% tariff is much more keen in China than in the US.
China continues to struggle to stimulate consumption, and foreign buyers are needed more due to manufacturing overpower. If exports are low, there is a high possibility that goods will pile up, and domestic consumption bases cannot absorb them. This situation exacerbates the impact of tariffs on the Chinese economy.
Trump – XI stares
Many of China’s exports to the US are exchangeable items. This means that American consumers can easily find alternatives. Therefore, they are less likely to pay for rising prices on Chinese goods due to tariffs. Instead, they buy goods imported from other countries.
That’s part of why Trump is pursuing important minerals in Ukraine, Riao said. He added that more companies will take part in the processing business if prices for these raw materials are no longer artificially low due to China’s monopoly.
According to US economist Davy J. Wong, the US and China are not a trade war, but a fight to reset international trade protocols and the world order.
“Beijing sees the challenge Trump proposed to reject China’s economic model,” Wong told the Epoch Times. “Additionally, a serious challenge to the entire Chinese system. Therefore, XI cannot enter the cave. Otherwise, his legitimacy within China will collapse.”
We have more cards
What pain do national leaders expect to endure while engaged in tariff standoffs?
For Xi, according to Riao, the resilience of the communist political system is important. Chinese people become poorer and more frustrated. But if the communist device is covering people, XI can hold back.
Trump’s pain will come from the US economy, Liao said. If the economy survives the initial shock and voters do not lose Trump’s patience, he can continue to focus on standing firm against the CCP.
The US stock market experienced a significant decline last week, driven primarily by global mutual tariff uncertainty. It has been the biggest three-day decline since the summer of 2020 amid the Covid-19 pandemic, with over $6 trillion in value evaporating on the stock market.
The stock market tumultuous changes are putting pressure on the White House and Trump. Trump often believes in the administration’s work for the rise of the stock market.
Balding said Trump is likely to be able to withstand while the stock market is being adjusted, as the US government prioritizes national security.
The president also said that the US-China trade imbalance has been linked to national security, and that Beijing is using a massive surplus with the US to fund the military.
“We don’t want that. I don’t want them to spend $500 (billion) or $600 billion a year on the military,” Trump said in his elliptical office on April 7th.
Both Balding and Yeh believe that if Trump can negotiate agreements with major countries like Vietnam, South Korea and Japan, businesses will be more certain if they can cut tariffs significantly within next month. This will help stabilize the stock market.
Washington holds more cards, Liao said.
In addition to further hiking tariffs, Liao said the US could put more pressure on the CCP by uniting with Chinese neighbours who don’t like regimes, such as Vietnam and India. The US can also adopt a human rights approach to publish reports on the origins of Covid-19 and publish evidence of Chinese conscience and forced organ collection of ethnic minority prisoners.
Andrew Moran and Luo Ya contributed to this report.
