When President Trump threatened tariffs in Canada, Mexico and China in January, saying that those countries need to do more to stop the flow of drugs and immigration to the United States, officials in Canada and Mexico have charts and videos detailing their efforts to strengthen their boundaries.
Canada created the “Emperor of Fentanyl,” committing fresh resources to combat organized crime, and Mexico sent troops to the border and brought cartel operatives to US custody. As a result, Trump suspended tariffs on his North American neighbors for 30 days.
China never did these kinds of overtures and, in Trump's view, did not make much of a move to stop fentanyl flow to the United States. So on February 4th, Trump moved forward by imposing a 10% tariff on all Chinese imports. Last week, the president said on March 4 that he would add another 10% in addition to all existing Chinese tariffs.
Trump is moving swiftly to change trade ties between the US and China. The Chinese are far more cautious and deliberate in trying to appreciate Trump and decide what he actually wants from China. Several of Trump's advisers, including Treasury Secretary Scott Becent and Secretary of State Marco Rubio, called on him as Chinese counterparts. However, the call between Trump and Chinese leader Xi Jinping failed to make it happen.
This situation underscores the perplexity of foreign leaders when dealing with a president just as unpredictable and unconventional as Trump.
According to people familiar with the argument, Chinese people don't want to be considered a plea and therefore don't want to start a conversation as they are wary of offering concessions before understanding the parameters of the argument. Instead, Chinese officials, scholars and others close to the government have been holding modest conversations to try to determine Trump's motivations, whilst they have highlighted various aspects of the country's potential trade agreements to assess American responses.
“My experience with Chinese people makes them suspicious in the first round of negotiations that they have hidden traps and careful reasons,” said Michael Pillsbury, a Chinese expert who advises the Trump administration on how to deal with the country.
China has said it would like to work with the US on mutually beneficial measures. However, people close to the Chinese government say they have struggled to identify the people in the US who they consider as trustworthy channels for communication.
They are also seeking to assess the importance of recent steps by the administration, such as the memorandum of understanding that proposed strict restrictions on investment between countries. Trump said he publicly contradicted the memo a few days after he signed it, welcoming China's investment.
“I think Chinese people are in the mood to hear meetings,” Myron Brilliant said. “They are taking in all sorts of inputs and they're starting to consult, they haven't pressed the panic button yet.”
“There's a willingness and desire to do business with the Trump administration, but China doesn't want that prerequisite and makes the parameters of the transaction more clear,” said Brilliant, a senior counselor at the advisory firm DGA-Albright Stonebridge Group.
According to more than half a dozen people familiar with the debate, in late February, a delegation, including former Chinese ambassador Cui Tiankai, met with representatives from a Washington think tank.
Through meetings and dinner, the Chinese delegation conveyed the hope that countries could reach accommodation, and several people said they had come up with ideas for potential trade deals, such as a massive purchase of American produce and investment in China in the United States.
They called for China to be treated as an equal partner and criticised past measures the Biden administration took away from China by saying it would “contain” it, like export control. The delegation also threatened that if further US tariffs were to be enforced, China could withdraw a package of law enforcement compiled to combat the fentanyl trade, which contained information that could be used to prosecute Chinese companies. They acknowledged that the Chinese economy is struggling and that more tariffs could hurt it.
Current and former advisers, familiar with Trump's ideas, say they're interested in hitting a wide range of deals with XI, which could involve Chinese purchases and investments, as well as a wide range of contracts that could involve cooperation such as nuclear security.
But Trump also believes China has replied a deal signed in 2020 by not buying enough products. Trump also doesn't dislike impose tariffs and increasing pressure on Beijing, viewing them as a source of leverage in negotiations.
Trump said he has a big relationship with XI and wants Chinese to invest in the US. When asked in February if he would sign a trade deal with China, Trump replied, “That's possible.”
“We have signed a great trade deal with China,” he said. “The problem is, Biden didn't push them to stick to it.”
In an interview with Fox News on Sunday morning futures, Commerce Secretary Howard Lutnick said instead of halting fentanyl production, Chinese people are giving “the biggest grants” to people who make the ingredients.
“The Chinese need to stop this murder of Americans,” he said.
Scott Kennedy, a senior adviser to the Center for Strategic and International Studies, a Washington think tank, said the tariffs Trump has threatened to impose on China since taking office are already nearly comparable to what he imposed in his first administration. In 2018, Trump brought ranged tariffs to 7.5-25% on Chinese imports over $350 billion.
“It's still early,” Kennedy said. “This should be seen as the floor of what is imposed, not the ceiling.”
Beijing has so far been cautious about retaliation, responding to a more limited number of unique tariffs on Trump's first tariff volley. But it probably shows that they want to use that advantage in the global supply chain to accurately painfully.
Chinese delegations, including Cui, had come to New York as Chinese top diplomat Wang Yi visited the United Nations. Wang was not following Washington, but one source said the Chinese embassy helped arrange a meeting for CUI in the country's capital.
Senior Communist Party officials and economist Zhu Min, including Fang Xinghai, former deputy director of the Chinese market regulator, also traveled to Washington to meet with the think tank community and some members of the government.
The Chinese seem to be searching for the best contact points for the government. In the previous Trump administration, the president's son-in-law, Jared Kushner, worked as an important supporter, just like private sector figures. Recently, Chinese people have been investigating the role Elon Musk, who has extensive business interests in China through Tesla, plays in the Trump administration.
Personally, the Chinese have shown an eagerness to start negotiating a deal, but I would like to know that they have direct access to Trump.
“We are a great opportunity to learn about our efforts to help people understand how we can help people understand,” said Yun Sang, director of the China Program at the Stimson Center, a Washington research group.
Chinese scholars and think tank officials began to bring various ideas to the forefront of trade contracts. According to one person with direct knowledge of the proposal, one proposal would be to make large investments in the US in areas such as electric vehicles, batteries and solar panels. Amid the unusual move, Chinese companies said they are happy to be licensing technology to American partners and financing minority ventures to alleviate national security concerns.
Another tentative offer is the purchase of goods and services from the United States in agriculture, aerospace, energy, and even technology. The Chinese also proposed to buy more US Treasury departments, and Trump recently expressed the move to threaten the US dollar by creating new reserve currencies by a few countries, including China and Russia. The Chinese proposed that Beijing could stand up to its efforts.
Chinese diplomats and academics have shown that Beijing may help the US achieve deals between Russia and Ukraine and help rebuild Ukraine.
In return, Chinese suggest that the US should commit to stabilizing economic relations. That could mean refraining from further tariffs and technology control and allowing more Chinese investment in the US.
Given the US national security concerns about its close ties with China, it is not clear that the two can find an agreement on either of these issues. And some analysts say Trump is moving to raise tariffs. Xi doesn't want to call a mediation from China because he doesn't want to see him as languishing to Trump.
“We're watching opportunities fly, but the longer you wait, the more hostility you get in the room and the less time you'll get on with the agreement,” Sun said.
Minho Kim contributed the report.
