When President Trump threatened tariffs on Canada, Mexico, and China in January, Canadian and Mexican officials rushed to Washington, armed with charts and videos to demonstrate their efforts to strengthen their borders. In response, Canada created a “fentanyl czar” and dedicated additional resources to combat organized crime, while Mexico deployed troops to the border and handed over cartel operatives to U.S. custody. As a result, Trump suspended the tariffs on America’s North American neighbors for 30 days.
China, on the other hand, did not make similar overtures and, in Trump’s view, failed to take significant action to stop the flow of fentanyl into the United States. Consequently, on February 4, Trump imposed a 10 percent tariff on all Chinese imports. He also announced plans to add another 10 percent on top of the existing Chinese tariffs on March 4.
Trump is swiftly transforming the U.S.-China trade relationship. In contrast, China is approaching the situation with caution and thoroughly assessing Trump to determine his true intentions. Some of Trump’s advisers, such as Treasury Secretary Scott Bessent and Secretary of State Marco Rubio, have engaged in calls with their Chinese counterparts. However, a call between Trump and China’s leader, Xi Jinping, has yet to materialize.
This situation highlights the challenges foreign leaders face in dealing with an unpredictable president like Trump, who is making substantial changes to trade terms with little notice or preparation. The Chinese are hesitant to initiate a conversation as they do not want to appear pleading and are cautious of making concessions before understanding the parameters of the debate. Instead, Chinese officials, academics, and others close to the government are conducting discreet conversations to understand Trump’s motives and assess potential trade deals between the countries.
Michael Pillsbury, a China expert advising the Trump administration on dealing with China, stated that the Chinese are initially suspicious in the initial rounds of negotiation, being cautious of hidden traps. The Chinese side has expressed a desire to work with the United States on mutually beneficial measures but is struggling to identify reliable channels for communication.
Furthermore, the Chinese are trying to assess the significance of recent administration steps, such as a memo proposing strict limits on investment between the countries. Trump publicly contradicted that memo days after signing it, stating that he welcomes Chinese investment. Myron Brilliant, who has spent years working with businesses to understand the Chinese and recently visited China, believes that the Chinese are in a wait-and-listen mode, taking in information and beginning consultations but not yet hitting the panic button.
There is a willingness among the Chinese to strike a deal with the Trump administration, but China does not want preconditions and seeks more clarity on the parameters of a deal. In late February, a delegation including Cui Tiankai, China’s former ambassador to the United States, met with representatives of think tanks in Washington. Over meetings and dinners, the Chinese delegation conveyed hope that the countries could reach an agreement and floated ideas for a potential trade deal, including significant purchases of American agricultural products and Chinese investment in the United States.
The delegation criticized past measures taken by the Biden administration to “contain” China, like export controls, and warned that if further U.S. tariffs were implemented, China could withdraw a law enforcement package designed to combat the fentanyl trade. They acknowledged that the Chinese economy is struggling and that additional tariffs could hurt it.
Some of Trump’s current and former advisers, as well as others familiar with his thinking, believe he is interested in striking a wide-ranging deal with China, involving Chinese purchases and investment, as well as cooperation on issues like nuclear security. However, Trump also believes that China reneged on the deal he signed in 2020 by not purchasing enough products. He sees tariffs as a leverage tool in negotiations.
Despite this, Trump maintains a good relationship with Xi and would like China to invest in the United States. When asked if he would do a trade deal with China, Trump responded that it is possible. He also stated that he did a great trade deal with China but criticized Biden for not pushing China to adhere to it.
In an interview on Fox News’ Sunday Morning Futures, Commerce Secretary Howard Lutnick accused China of giving maximum subsidies to people manufacturing fentanyl ingredients instead of stopping the manufacturing. He argued that China needs to stop the murder of Americans.
The tariffs Trump has threatened to impose on China are already comparable to those he imposed during his first administration. In 2018, Trump put tariffs ranging from 7.5 to 25 percent on over $350 billion worth of Chinese imports, which remain in effect. Beijing has been hesitant in retaliating but has signaled that it is willing to go further, possibly using its dominance in the global supply chain to exert pain.
The Chinese delegation that included Cui had also traveled to New York while China’s top diplomat, Wang Yi, visited the United Nations. While Wang did not continue to Washington, the Chinese embassy helped arrange meetings for Cui in the nation’s capital. Senior Communist Party officials, including Fang Xinghai, the former deputy chief of China’s markets regulator, and the economist Zhu Min, also traveled to Washington and met with some members of the think tank community and government.
The Chinese appear to be exploring the best points of contact for their government. In the previous Trump administration, Trump’s son-in-law, Jared Kushner, had served as an important go-between, as had private-sector figures. Recently, the Chinese have been inquiring about the role Elon Musk, who has extensive business interests in China through Tesla, will play in the Trump administration.
Privately, the Chinese have expressed a willingness to start negotiating a deal but want to have direct access to Trump. There is a sense among the Chinese that communication channels have been lacking. Chinese academics and think tank officials have been floating various ideas for a trade deal, including major investments in the United States in areas such as electric vehicles, batteries, and solar panels, which could create an estimated 500,000 U.S. jobs. Chinese companies would be willing to license technology to American partners and hold minority stakes in ventures to mitigate national security concerns.
Another tentative offer from the Chinese involves purchasing goods and services from the United States in agriculture, aerospace, energy, and possibly technology. The Chinese have also suggested buying more U.S. Treasuries and expressed a willingness to help the United States achieve a deal between Russia and Ukraine and assist in Ukraine’s reconstruction. In return, the Chinese have proposed that the United States commit to stabilizing the economic relationship, refraining from further tariffs and technology controls, and allowing more Chinese investment in the United States.
However, considering national security concerns in the United States about closer ties with China, reaching an agreement on these issues is uncertain. Some analysts argue that Trump’s moves to increase tariffs are making any conciliation from the Chinese less likely, as Xi will not want to appear as if he is caving to Trump.
Source: https://www.nytimes.com/live/2025/03/04/us/tariffs-us-canada-mexico-china
