Donald Trump will use tariff negotiations with 70 U.S. trading partners to isolate the Chinese economy.
“The idea is to extract commitments from U.S. trading partners to isolate China’s economy in exchange for reductions in trade and tariff barriers imposed by the White House,” reports the Wall Street Journal.
The U.S. will get commitments from our trading partners to refuse to transit any Chinese goods across their countries, prevent Chinese companies from selling their products in their territories, and refuse to buy cheap goods from China.
If successful, it would be a total, “take no prisoners” trade war, which is probably the best way to fight under these circumstances. China’s mixed economy puts the U.S. at an instant disadvantage as China can sell anything at a loss just to grab market share. The strength of the U.S. economy is that we can out-produce the Communists. Isolating China’s economy would make Chinese goods more expensive and harder to dump.
China’s economy has been teetering for several years. If the real estate bubble collapses, millions of Chinese whose wealth is tied up in housing will suffer. China has been experiencing continuous deflation, with prices falling for six consecutive quarters. 900 million Chinese still live in what would be considered “low middle income” in the U.S. (Income of less than 3,000 yuan or approximately $412).
China’s strengths are formidable, and a total collapse isn’t likely. But the absolute last thing the Communist Chinese need right now is political instability. And there’s a chance that a trade war with the United States will bring that about.
America has broached the idea of isolating the Chinese economy with several of its 70 trading partners with which we’re currently negotiating.
Bessent pitched the idea to Trump during an April 6 meeting in Mar-a-Lago, said people familiar with the discussion, saying that extracting concessions from U.S. trading partners could prevent Beijing and its firms from avoiding U.S. tariffs, export controls and other economic measures, the people said.
The tactic is part of a larger strategy being pushed by Bessent to isolate the Chinese economy, which has gained traction among Trump officials recently. Debates over the scope and severity of U.S. tariffs are ongoing, but officials largely appear to agree with Bessent’s China plan.
It involves cutting China off from the U.S. economy with tariffs and potentially even cutting Chinese stocks out of U.S. exchanges. Bessent didn’t rule out the administration trying to delist Chinese stocks in a recent interview with Fox Business.
“The ball is in China’s court. China needs to make a deal with us. We don’t have to make a deal with them. China wants what we have…the American consumer,” White House press secretary Karoline Leavitt said at a press briefing.
After Trump announced his 90-day pause in the tariffs on April 9, Bessent has taken the lead in talks over reciprocal tariffs and believes that we’re close to deals with Japan, the U.K., Australia, South Korea, and India.
Related: The Communist Chinese Have Won. The Largest Opposition Party in Hong Kong Is Disbanding.
If the administration achieves the goal of negotiations — to convince other countries to make it harder for China to sell to them and through them — all the sturm und drang in the markets and among our allies will have been well worth it.
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