Trump’s misreading of China’s resolve

One could interpret US President Donald Trump’s tariff imposition on some 49 countries as an invitation to negotiate their respective trade positions with the United States. The response of most countries has been to take up the invitation very seriously.

With three months into the Trump presidency, there has been very little high level diplomatic contact with China. Its as if the White House has been almost totally absorbed with Ukraine, Gaza, Yemen, Panama, and Greenland.

There was some expectation that Trump may seek an early meeting with his counterpart, China’s President Xi Jinping. However, this has not happened with just about the only public comment coming out of Trump’s cabinet was Secretary of State Marco Rubio, talking about peace in the Taiwan Strait with Japan and South Korea. A little provocative so early into the administration.

Then, a few weeks later came Trump’s unilateral proclamation with the ranting about how the United States have been taken advantage of by the rest of the world for so long. Trump added China to his list, before there was any meeting, talks, negotiation between China and the United States. This amounted to a surprise hit from the left side.

Had Trump afforded China with the same position he gave Russia, i.e. “Zero rise” in tariffs, there would have been a much better opportunity to negotiate a whole new trade deal with China. Now, after the ‘tit for tat’ tariff hikes between the two countries, any future negotiations will be focused upon bring back normality, rather than striking a completely new deal that progresses the China-US relationship.

In February, there was talk that some form of Yalta 2.0 would occur between President Putin of Russia, President Xi of China, and Trump. Such a meeting had the potential to be a legacy builder, as it could have laid out the ‘spheres of influence’ between the three powers for the next 50 years.  

In addition, the Trump administration appears to be in some disarray over the tariffs. There appears to be some divide among Trump’s closest advisors on the subject. There is also a bleak unappreciation of the histories and cultures of the Asian region, especially the realities within China today. China is a country staked in high national pride, which has been grossly underestimated. Trump’s imposition of tariffs upon China is seen as an assault with insult.

If one insults a compatriot, one should expect a similar reaction in return. A ‘tit for tat’ response quickly came from China.

The feeling in Beijing is that Trump has acted like a ‘circus ring master’. He is being mocked all around China, seen as a ‘barbarian’, while the stature of President Xi Jinping just rose higher.

The Trump administration has forgotten when China placed tariffs on Australian barley, beef, cotton, lamb, lobsters, and wine, when it felt insulted by Australia a few years ago. They forgot the ‘wolf warrior’ style China could act with. The former Morrison government in Australia can vouch for that when all ministerial contacts were cut for a couple of years. Trump advisors had forgotten this. Now China has placed a ban on the export of rare earth metals to the United States, which is critical to the US economy. The Trump administration is very quickly developing costly contingencies to safeguard supply.

The hard-handed approach of Trump, appears to have not considered the consequences. China’s trade with the United States is 15 percent of its total world trade. This amounts to 2.5 percent of China’s GDP. Goods made in China represent 16.5 percent of US imports.

The victim of the tariffs is not China, but US transnational companies manufacturing in China for the US market. US consumers will feel the brunt of the tariffs, as they will in effect be the people who are paying them. US companies cannot just simply relocate back to the United States to manufacture.