Dem
47
GOP
53
Donald Trump has spent many years "negotiating" with people weaker than himself. He ordered pianos for his hotels from some company. After they were delivered, he said they were crappy and would only pay 50% of the bill. What could the vendor do? Suing would take years and cost a fortune in lawyers. The vendor had to eat the loss and almost went bankrupt. Trump's whole career has been like this, so he figured he could play China the way he has played everyone else for decades. Turns out China has some cards, too.
Trump put tariffs on Chinese imports and figured Chinese President Xi Jinping would come beg him to please, please remove them. Instead Xi has put export controls on rare earth elements that are crucial for the batteries in electric cars, magnets, semiconductors and various kinds of motors. That's not what Trump was expecting, so he has threatened 100% tariffs on all Chinese exports to the U.S. on top of the existing tariffs. He also threatened to cancel an upcoming meeting with Xi, who is now quaking in his boots. We will soon see who gives in. Our prediction: TACO.
If Xi calls Trump's bluff and doesn't budge, Trump will either have to actually impose the tariffs or become a paper tiger. Xi is not afraid of paper tigers. We will also point out that this is the Year of the Snake on the Chinese Zodiac, and Xi is not afraid of snakes, either. If 100% tariffs are imposed on all Chinese exports to the U.S., inflation will soar and there goes the House next year and maybe the Senate. Trump knows this and so does Xi. You don't get to be the long-term ruler of China if you are stupid. At least not since Chairman Mao died. Consequently, Trump really doesn't intend to impose punitive tariffs. The threat is supposed to scare Xi. Unfortunately for Trump, Xi knows this. But Xi also knows Trump needs to save face, so Xi may make some minor offer, like agreeing to import an extra million tons of soybeans so Trump can crow about his great victory, when in reality, Trump got almost nothing out of the deal except maybe one tweet that will be forgotten in a week.
It is also possible that Xi is tired of having to placate Trump all the time and wants to teach him a lesson, so he refuses to negotiate and Trump is actually forced to do something. Trump really doesn't want to impose tariffs due to the inflation that would cause. He does have other options, though. He could decide to play the export control game himself. For example, he could ban the export of spare parts for Boeing aircraft, something that could hurt China (unless China has already thought of this and stockpiled spares). He could also block the sale of new Boeing airplanes to China, but then China would threaten to switch to Airbus planes. Trump probably does not want that because Boeing has factories in many states and buys parts from many states, including red states.
China could respond to more threats by putting export controls on crucial chemicals, ingredients for medicines, and much more. With a minor effort, Xi could devastate the U.S. economy if he wants to. That would hurt China too, but Xi doesn't have to worry about an election next year. If Trump overplays his hand, it could get nasty. (V)