US Trade Policy Strategy Unveiled: A Focus on China
The United States’ strategy in its trade policy remains unclear due to the constant shifts in decisions by President Donald Trump. However, as negotiations with dozens of countries kick off, a clear idea is emerging – to concentrate the trade war with China and attempt to isolate the Asian country through agreements with other trading partners. In some cases, as Trump himself suggested regarding Latin America, countries might be tempted to choose between China and the United States.
Scott Bessent Takes the Lead
Scott Bessent, the Treasury Secretary, who harshly criticized Spain’s approach to China and later issued a cold statement about his meeting with the Spanish Economy Minister, Carlos Cuerpo, appears to be the mastermind behind this strategy. The first step was taken with the partial truce on so-called reciprocal tariffs. Trump excluded China from this truce and imposed tariffs of 125%, on top of the existing 20%, citing fentanyl as the reason, along with other protectionist measures.
The exemption of tariffs on imports of mobile phones, computers, and other technological products is not so much a concession to China but to tech giants like Apple or Dell, who were heavily impacted by these tariffs. On the other hand, Nvidia suffered from export restrictions on its H20 integrated circuits, powerful microprocessors designed specifically to circumvent previous bans.
Toughening Stance on China
Meanwhile, the Trump Administration has toughened its stance towards Beijing this week. After the president extended an olive branch for negotiations, White House spokesperson Karoline Leavitt was firm in her press conference on Tuesday, reading a statement from the president. “The ball is in China’s court. China needs to make a deal with us. We do not need to make a deal with them,” she stated. She emphasized that China, like any other country, desires what the US has – American consumers’ spending power.
Treasury Secretary Bessent also hinted in the same direction last week, criticizing other trading partners as well. He expressed optimism about reaching agreements and then collectively addressing China as a group.
Challenges and Risks
The weakness of this argument lies in Trump’s damaged trust with allies, making siding with China over the US a high-risk operation. Despite Spain’s forefront position with Pedro Sánchez’s visit to Beijing, aligning with China as a strategic partner is a European strategy.
Trump appears willing to resort to coercion and force countries to choose between the two superpowers. In a recent interview, he suggested that Latin American countries might have to abandon China’s Belt and Road Initiative to engage with the US. Trump has already secured concessions from Mexico and Canada on imports from China through his initial tariffs. Concerns arise over China indirectly channeling products to the US through other trading partners.
Progress with Japan
China remains the president’s primary focus, much like Japan was in the 1980s when Trump, then a real estate developer, advocated for hefty tariffs on Japanese imports. Now, Japan is seen as a potential ally in the battle to isolate China. Trump personally attended the first tariff negotiation meeting with Japan, where the Japanese appointed their Minister of Economic Revitalization, Ryosei Akazawa, as the negotiator.
The meeting marked Trump’s first direct participation in trade negotiations. He skipped the meeting between Vice President of the European Commission, Maroš Šefčovič, and Commerce Secretary Howard Lutnick. Trump’s engagement with Japan signifies a potential shift in alliances to counter China’s influence.
Conclusion
The US trade policy is pivoting towards concentrating the trade war on China and forming alliances with other trading partners to counter Chinese influence. While this strategy poses risks and challenges, Trump’s administration is determined to push forward in reshaping global trade dynamics.
FAQs
What is the main focus of the US trade policy strategy?
The primary focus of the US trade policy strategy is to target China in the trade war and build alliances with other countries to isolate China.
How is the Trump administration approaching trade negotiations with Japan?
The Trump administration is engaging in direct negotiations with Japan, viewing the country as a potential ally in countering Chinese influence.