Experts say China isn't too worried about Trump's tariff threats

Image: China's Vice Premier Liu He shakes hands with U.S. Treasury Secretar
China's Vice Premier Liu He shakes hands with U.S. Treasury Secretary Steven Mnuchin as Yi Gang, governor of the People's Bank of China (PBC) and U.S. Trade Representative Robert Lighthizer stand next to them at Diaoyutai State Guesthouse in Beijing, Chin Copyright Nicolas Asfouri Pool via Reuters file
By Corky Siemaszko with NBC News U.S. News
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The Chinese strategy, one expert said, is basically to let Trump bluster and then resume talking with more serious administration officials.


The Chinese were not surprised by President Donald Trump's threats to impose more tariffs on their goods, several experts said Monday — they just assumed it was Trump being Trump.

On Sunday, Trump appeared to imperil the ongoing trade talks with China — sending stock prices on a roller coaster ride Monday — with the surprise announcement that he intended to impose tariffs on almost all goods imported from China by Friday.

"I am not sure how literally Trump's threat is being taken in Beijing, but he has articulated essentially the same threat before," wrote William Hurst, a Northwestern University political science professor and an expert on Chinese politics and legal institutions, in an email to NBC News.

"So it is likely not a surprise, except perhaps in its timing."

And Trump may have inadvertently strengthened the Chinese bargaining position, said Hurst.

"The US seems to want trade negotiations to conclude quickly, whereas it is probably in China's interest to delay or drag them out as long as possible," Hurst said.

"I think the Chinese leadership generally views Trump as a weak president with some erratic tendencies," he added. "Trump is at least potentially useful for China because he is accelerating America's retreat from the world and alienating erstwhile allies and partners as he does so."

Trump tweeted his tariff threat on Sunday and accused the Chinese of trying "to renegotiate" parts of the deal that both sides were thought to have already agreed on.

Earlier this month, Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer had characterised the proposed trade deal as "getting into the final laps".

But Trump tweeted that he would raise import taxes on $200 billion in Chinese products to 25% from 10% as of Friday. That's on top of a 25% duty on another $50 billion of Chinese imports. Beijing had imposed penalties on $110 billion of American goods.

Stock prices initially plunged on Wall Street Monday amid fears of an all-out trade war between the world's two largest economies before staging a stunning comeback as investors bet China and the US would reach a trade deal despite Trump — not because of Trump.

Hurst said China is playing a long game against the US while Trump wants to appear that he's trying to make good on his promise to protect industry in the Rust Belt states he needs to win re-election.

"China hopes to paint Trump and the US not so much as adversaries but increasingly as outliers and antagonists in the international economic and security order," said Hurst. "If the United States becomes more isolated and less trusted, this weakens any claim to American hegemony. China does not want to topple the United States but wants to fill some of the space left open as America recedes from its position of global dominance.

The Chinese view Trump "as untrustworthy and difficult," said Phillip Braun, a Northwestern University finance professor who is an expert on Chinese politics and once served as an adviser to the prime minister of Thailand.

"When he makes announcements like this, it makes it difficult for the Chinese," he said. "They can't be seen by their own people as capitulating to Trump."

So their strategy, Braun said, is basically to let Trump bluster and then resume talking with Mnuchin and Lighthizer.

"In the end, Trump just wants to look good," said Braun. "The Chinese saw what happened with NAFTA when he threatened Mexico and Canada with tariffs."

Braun was referring to the North American Free Trade Agreement, which Trump had called the "worst trade deal in the history of the world" when he was running for president.


NAFTA was also deeply unpopular in states like Michigan, Pennsylvania and Ohio, which had, for generations, seen good-paying manufacturing jobs migrate to Mexico.

In the final months of talks to renegotiate NAFTA, Trump threatened to impose a 25% tariff on automobile and auto parts exports to the US from Mexico and Canada.

"Without tariffs we wouldn't be talking about a deal," Trump said in October after announcing a new agreement to replace NAFTA called the United States-Mexico-Canada Agreement.

But neither the US nor Mexico and Canada have ratified the new deal.

A team from Beijing was set to have talks with American negotiators Wednesday while the two companies push for a trade agreement, according to CNBC. It was unclear if the talks would still be taking place on Wednesday.

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