With US President Donald Trump and Chinese President Xi Jinping facing a trade war that has made global markets and businesses large and small, the countless questions about the mind are who will blink first?
Trump has hampered China with a 145% tariff. Beijing is retaliating with a 125% obligation.
On Tuesday, Trump strengthened his trade salvo by ordering a national security review on the imports of key minerals. Most of them come from China.
Previously, Bloomberg News reported that China had ordered airlines not to deliver Boeing Jets and not to halt aircraft-related equipment and parts from US companies, and the Hong Kong Post Office announced it would not process US mail.
“Make it impossible for China to sell to the US makes it impossible for China to sell to the US,” said Vina Najibla, vice president of research and strategy at the Asia-Pacific Foundation of Canada.
“It’s almost impossible to contemplate a complete decoupling.”
“Who blinks first depends on who can withstand more pain and who is better prepared,” she added.
Trump has long accused China of stealing the US with trade, but analysts have questioned whether his administration has a clear goal as to what he wants to achieve with that tariff.
Harry Broadman, a former assistant US trade representative and one of the WTO’s chief negotiators, said it is not clear whether Trump wants to shut down the trade deficit with China or end business with the country.
“How does Trump deal with US companies that require goods from China for their factories to work? That’s not black and white,” Broadman told Al Jazeera.
“The market is layered through different stages of production, with components coming from all over the world. The global economy is chopped vertically, so it’s hard to tell who the winners and losers are.”
Broadman said Trump’s trade approach was simple and unrealistic.
“He’s clearly a real estate deal guy, but not in the international market… he said, “How can I win and how can I lose my opponent?”
“Not more refined than that. He’s not interested in dividing the loot. But you don’t go that far.”
miscalculation
Trump has made it clear that he believes it will be up to China to come to the negotiation table.
In a statement Tuesday, White House spokesman Caroline Leavitt cited Trump as saying “The ball is in Chinese court.”
“China needs to trade with us. We don’t need to trade with them,” Levitt told the media briefing in a statement that she said she came directly from Trump.
Analysts say the US economy has entered the trade war on a relatively strong position compared to China, which faces headwinds, including high unemployment and low domestic demand, but Beijing has been preparing for a trade war since Trump’s first term.
“The Trump administration miscalculated that China would soon come to the negotiation table and respond to the threat,” Dexter Tif Roberts, a senior non-resident fellow at the Atlantic Council’s Global China Hub, told Al Jazeera.
Last week, People’s Daily, the Chinese Communist Party mouthpiece, said the country was prepared for tariffs after accumulating “rich experience” during the past eight years of trade tensions with the US.
“For China, this is an almost existential struggle in both trade and security,” Roberts said. It mentioned repeated statements from Xi that the East is increasing while the West is declining.
China has diversified its trade away from the US for many years. Includes reducing dependence on US agricultural products such as soybeans.
In 2024, 14.7% of China’s exports were sent to the US from 19.2% in 2018.
On Monday, XI launched a five-day Southeast Asia tour aimed at buttless Chinese self-style image as a more free trade champion than the US and a more trusted partner in the region.
China also has political considerations.
Xi constructs an image of a strong man and surrenders quickly to the US will damage this image.
“They could find an MO that both sides declare victory, otherwise it would be a core thing and shut down the entire trade between us and China.
“False obsession”
Robert Rogoffsky, a professor of trade and economic diplomacy at the Middlebury International Institute in Monterey, California, said he expects Trump to blink first.
“There’s so much flashing happening in Washington, so it’s almost hard to believe there’s nothing more,” Rogowski told Al Jazeera.
“Trump has this false obsession with tariffs and he is under pressure from special benefits, so he blinks. He is a wealthy class who has lost a huge amount of wealth in the inventory and bond markets,” says Rogowski, adding that the recent turmoil in the financial markets has damaged his support base.
On Friday, the Trump administration announced it would exempt technology imports from 145% collection in China, but later White House officials said temporary grace and sector tariffs were in the pipeline.
Trump on Monday also suggested he is considering a 25% car rate waiver.
“There’s a layer of negotiation in every public policy negotiation. A lot of negotiations with people on the other side of the table and with people behind you. [who helped you] To reach the table,” Rogovsky added that in this case, Trump “negotiated” with special interest in the technology and the automotive sector and “quickly given to him.”
Trump may have been driven by fear of losing support from industry executives, he added.
“process [of giving in] It starts and continues before everyone reaches Beijing. And you can sit and see Beijing,” said Rogowski, describing Trump as “ignorant.”
“The apprentice worked because they were powerless mid-level hosts that others had managed,” he noted Trump’s hit reality television show.
Trump’s lack of policy consistency has also damaged the United States at other levels, according to Wei Liang, an international trade expert at the Middlebury International Institute.
The focus on former President Joe Biden’s China was “strategic and with allies, but Trump alienates everyone,” Lian told Al Jazeera.
“In the short term, the MNC and countries must coordinate and crisis management. But in the long term, the US is eroding its relationship, especially in security,” Liang said.
Most countries don’t have a real alternative to the US, the fact that they buy Washington time, but in the long run, countries “will try to develop a US+1 strategy because the US+1 strategy is no longer the most reliable market for security treaties,” she said.
Source link
