Hours after Donald Trump threatened Beijing with “massive” tariffs on its rare earth export controls on Friday, he appeared to put his words into practice by imposing a 100% levy on imports from China.
But the American president’s decision suggests a more calibrated approach than some had imagined.
Instead of imposing the tariffs immediately, they will take effect on November 1, two days after a scheduled meeting with President Xi Jinping. That suggested Trump was creating space for a solution, even though he said there was no point in meeting Xi at the Apec forum in South Korea.
Asked what would happen if China rolled back export controls, Trump said: “We’re going to have to see what happens. That’s why I did it on November 1.”
A former US official called his response a “mega Taco”, using the acronym for “Trump always chickens out” – a phrase that became fashionable after he backed down in the face of Chinese pressure.
“Xi will see things exactly for what they are: a clear indication of weakness, a lack of resolve, even desperation,” he said.
The drastic export controls shocked the White House, in part because they came three weeks before Trump held his first meeting with Xi since returning to the White House.
On Friday morning, Trump announced he might cancel the meeting. He later said: “I didn’t cancel, but I don’t know if we’ll have it. But I’ll be there anyway, so I guess we could have it.”
China’s new controls require foreign companies exporting products containing rare earths from China to obtain approval from Beijing. Combined with Trump’s response, they erased the trade ceasefire between the powers.
“Two huge heavyweights in the ring. I haven’t had this much fun since the Manila Thrilla,” said a second former U.S. official, referring to the 1975 boxing match in the Philippines between Muhammad Ali and Joe Frazier.
In his first comments on the issue, Trump lashed out at China, calling the controls “very hostile.” He said that beyond tariffs, many other countermeasures were being “seriously considered.”
His reaction raised hopes among some China hawks in his administration, frustrated that he had prevented them from taking strict security measures to avoid jeopardizing trade talks and the summit.
A US official said “Christmas has come early” for Chinese hawks.
These hawks hope that China has angered Trump so much that he will allow them to start taking aggressive action – just as he green-lighted tough security measures against Beijing in 2020 after blaming China for Covid-19 when its handling of the pandemic was criticized.
“China hawks within the administration must feel vindicated as they have watched with dismay as Trump has adopted a more conciliatory approach to China in recent months,” said Wendy Cutler, vice president of the Asia Society Policy Institute.
People familiar with the matter said the United States was preparing a series of possible retaliatory actions, including sanctions on Chinese companies, new export controls and putting Chinese groups on a trade blacklist.
Experts question whether China has gone overboard with export controls or whether Trump’s response is playing into Beijing’s hands.
Dennis Wilder, a former CIA China expert, said Trump was doing what Xi wanted: reacting emotionally.
“Trump is embarrassed and needs to protect himself from criticism from hawks,” Wilder said. “Xi must have known exactly how Trump would react. He upped the ante in the great game of poker. Does Trump fold or put in his chips?”
But others argued that China had misinterpreted the United States. “This week’s expansion of export controls looks like a miscalculation. What Beijing sees as leverage, Washington sees as betrayal,” said Craig Singleton, a China expert at the Foundation for Defense of Democracies.
John Moolenaar, Republican chairman of the House China Committee, said China had “fired a loaded gun on the U.S. economy.” He urged Congress to pass legislation to counter Beijing, including a bipartisan bill that would revoke the permanent, normal status of China’s trade relations.
The first former US official said the key to what happens next between Beijing and Washington will depend on how Xi responds to Trump’s threat.
“The Chinese decision has broken everything. Xi will not say mea culpa“, he said. “His approach has been maximum engagement, zero concessions and strong asymmetric retaliation.”
Nazak Nikakhtar, a trade lawyer at Wiley Rein, argued that China was unlikely to back down, especially after seeing U.S. markets plummet earlier this year when Trump imposed 145% tariffs on its products.
“Some people think this is a negotiation, but they are dead wrong with Xi,” said Nikakhtar, a Commerce Department official during Trump’s first term. “This time, China will not give in to threats. And as Xi watches our markets fall, his position is that the United States is shooting itself in the foot.”
But Wang Wen, dean of Renmin University of China, said the new tensions would be resolved through negotiations.
“China’s countermeasures… are beneficial and will ultimately lead to the United States returning to the negotiating table,” Wang said.
“China has become accustomed to the ‘paper tiger’ behavior of the United States.”
