President Trump’s decision on Thursday to announce around $50 billion in China-specific tariffs signifies the cold wind that has washed over the president’s relationship with his Chinese counterpart, Xi Jinping.
China is now preparing its own counter-tariffs.
That said, Trump and Xi’s increasingly antagonistic relationship isn’t simply rendered in tariffs. In recent days, both leaders have taken other steps signifying their increasing animosity.
Enter Taiwan, for example.
Last week, Trump signed the Taiwan Travel Act into law. Calling for more high-level visits between U.S. and Taiwanese senior leaders, the legislation sparked fury in Beijing, which views Taiwan as a province in rebellion. China’s response was predictably emotional, warning of possible military action.
Even then, there’s a far broader portfolio of differences between the U.S. and China.
China has steadfastly rejected U.S. efforts to strengthen the Iran nuclear agreement, choosing instead to bolster military and economic ties with Tehran.
China continues to buy influence among U.S. allies by a range of military and economic inducements and threats. In response, the Trump administration is sending carrier groups on visits to Vietnam and recently announced a new realpolitik strategy designed to constrain Chinese ambition.
This animosity strikes a stark difference between now and last November, when Trump visited Beijing and laughed with Xi at various high-society events.
So what sparked the malaise? It seems clear that Trump has lost confidence in Xi as a friend and close partner.
Most obvious here is Xi’s evident unwillingness to help Trump redress the U.S.-China trade imbalance and the American president’s concerns over intellectual property theft.
And while Xi’s reluctance to give ground here is fundamentally unsurprising, Trump seems to have believed his personal relationship with Xi would move the needle. To be fair to Trump, he deserves credit for breaking from the Xi love-in just when the Chinese assumed their red-carpet pageantry had him fixed.
Still, Trump’s declining trust in Xi is also partly motivated by China’s disinterest in helping the U.S. resolve the North Korean nuclear crisis. While China has spoken a good game on North Korea, it has taken little practical action to exert major pressure on Kim Jong Un’s regime. It appears that Trump has now seen enough intelligence briefings to see the truth.
That leaves one final question: Are these tariffs the right move?
Because of their context, I say yes. Don’t get me wrong, I’m an avowed free-trade advocate, but tying these tariffs to China’s intellectual property theft is a good move.
After all, when it comes to intellectual property theft, China is like the alien machines in “War of the Worlds.” Physically and in cyberspace, Chinese intelligence officers and agents fly around sucking up whatever proprietary information they can grab. The scale and ambition of their effort is vast, the damage to U.S. interests reaches into the hundreds of billions of dollars, and Chinese efforts to hide their fingerprints are often nonexistent.
This threatens America’s comparative advantage and our economic ability to lay the foundations for future prosperity.
For that reason, Trump is right to introduce Xi to the curveball.
