As America and the world continue to try to navigate the tariff mine field Trump planted, some countries are reportedly trying to negotiate their way to a safe path ahead while others like China have vowed to fight. When Trump imposed additional 34% tariffs on top of existing tariffs, China immediately responded with a retaliatory 34% tariff on goods imported from America. Given that China is the world’s largest importer of soybeans, this could hit America’s farmers hard just like it did during Trump’s first term. During the trade war with China that Trump started during his first term, it cost the United States about $28 billion in aid to farmers to offset the impact. This time it is likely to be worse and more costly.
I believe that the China Trump is dealing with now is a bit different than the China Trump was dealing with in his first term. Trump recently posted that if China doesn’t back down, he will impose additional tariffs up to 50%. China has said they are ready to ‘fight to the end.’ I believe them. I think it is going to be much more difficult to bully China this time around. They learned their lesson the first time and are likely in a much better position to push back this time.
The irony in all of this is that the actions Trump is undertaking with this global trade war is likely to facilitate the very thing he said he is trying to counter, i.e., the growing influence of China as a world power. Trump pulled out of the Trans-Pacific Partnership in his first term and that agreement was replaced by the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). The CPTPP consists of twelve members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United Kingdom, and Vietnam.
The group consists of some of our allies including Canada and Mexico which have recently been hit with Trump tariffs and, as a bonus, completely disrespectful and insulting remarks. Not surprising, China has requested to be allowed to join this group because the one thing China understands that Trump doesn’t, is that strong trade relationships lead to increased global power. It is completely consistent with China’s Belt and Road Initiative started in 2014 to invest in infrastructure projects in 150 countries and nurture trade relationships with those countries.
China understands the strategic value of investing in other countries. The Trump administration just slashed billions of dollars in foreign aid. Who will those countries turn to for help? Bingo! China will likely swoop in to fill the vacuum and further increase their global footprint.
The best way to counter China’s growing global influence is to develop allies and strategic trade relationships. Trump is doing the exact opposite. He has become obsessed with a fantasy thinking that these tariffs will ultimately lead to the US treasury being awash in money to the point where Federal income taxes can be slashed or eliminated. He has cherry-picked and misrepresented historical events to justify these beliefs. This is no different than religious zealots’ cherry-picking phrases from the Bible to justify whatever actions they want to take. None of it is based upon sound reasoning.
Trump and Hegseth want to dramatically increase military spending under the belief, I assume, that if we are a bigger bully, we can just bend everyone in the world to our will. Unfortunately, that type of thinking as not worked out for any empire throughout history and it will not work out for the United States. In today’s world, the thing that will make America great and will keep America safe, is a network of strong allies and robust trade relationships, the very thing Trump is destroying. China understands this and will, I believe, ultimately profit from Trump’s folly.
