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4 days ago
- Business
- Fox News
GORDON CHANG: Is Trump rescuing China's Communists?
Print Close By Gordon Chang Published May 27, 2025 "If I didn't do that deal with China, I think China would have broken apart," President Donald Trump told Fox News' Bret Baier earlier this month. Trump was talking about the arrangement, announced May 12, in which the United States and China agreed, among other things, to reduce their general tariff rates on the other by 115 percentage points for 90 days. Most analysts have scored the pact as a win for China. The reduction in American tariffs allows China to resume sales to the U.S.—America accounts for more than a third of global consumer spending—but the reduction in Chinese tariffs does little to permit American goods to enter China. The main obstacles to American exports to China are China's non-tariff barriers, and the announced pause does nothing to end non-tariff barriers put in place before April 2, "Liberation Day," as Trump called it. BILLIONAIRE RAY DALIO RAISES ALARM OVER CHINA, SAYS TRUMP RENEGOTIATING TRADE DEALS 'HAS TO HAPPEN' Moreover, the reduction in U.S. tariffs is akin to unilateral disarmament. U.S. tariffs are generally remedies for China's theft of U.S. intellectual property and its increasingly predatory trade practices. During the pause, China is continuing these unacceptable practices without facing the penalty of America's elevated tariffs. "China came out on top," Alan Tonelson, an American trade expert who blogs at RealityChek told me. "No question, we got the short end of the stick." Trump's "tariff war," as the Chinese regime calls it, could not have come at a worse time for the Communist Party. The country's economy was already in distress. Yes, the National Bureau of Statistics continually issues reports of robust growth of gross domestic product—5.4% in the first quarter—but in reality, the economy looks like it is contracting. Price data for February, March, and April confirm China is in a deflationary spiral. DONALD TRUMP DETAILS 'MOST EXCITING PART' OF CHINA TRADE AGREEMENT Trump's "Liberation Day" tariffs battered China's already struggling export sector. Factories were closing, unpaid workers were demonstrating in the streets, smaller banks were restricting withdrawals. As Trump suggested to Baier, the Chinese regime was struggling and might not have survived his high tariffs. The 90-day pause, therefore, gave the Chinese regime a lifeline. Now, China's factories can make and ship products to America for the most important time of the year for them: the Christmas season, which starts around June. The Communist Party is no stranger to rescues from America. Three times American presidents have saved communism in China. TRUMP SAYS CHINA AGREES TO 'FULLY' OPEN COUNTRY'S MARKETS TO US BUSINESSES Richard Nixon did that in 1972, near the end of Mao Zedong's decade-long Cultural Revolution, essentially a civil war that almost brought down the regime. His visit to Beijing signaled to the Chinese people that America stood with communist rule. George H. W. Bush threw Deng Xiaoping a lifeline after the nation-wide demonstrations and slaughter in Beijing's Tiananmen Square in 1989. Finally, there was Bill Clinton's trade deal in 1999, which came at a low point for a Chinese state then struggling to emerge from the Asian Financial Crisis. The deal paved the way for China's fabulously beneficial—and wholly premature—entry into the World Trade Organization. TRUMP SAYS 'TOTAL RESET NEGOTIATED' WITH CHINA DURING TARIFF TALKS IN GENEVA Washington had a great need to enlist Mao in the Cold War struggle against the Soviet Union, but Bush and Clinton would have been much better off without the Chinese Communist state. Bush and Clinton, leading a dominant America, thought that Chinese leaders would reciprocate and work cooperatively with Washington and its partners. The Communist Party, almost everyone then assumed, would see it in its interest in maintaining an international system that was responsible for China's rise. "By now, it's clear that our hopeful assumptions about China's trajectory were fundamentally wrong," Charles Burton of the Sinopsis think tank told me this week. "As China grew stronger, the Communist Party became even more hostile, belligerent, and dangerous." This month, Xi Jinping demonstrated that cooperation with his hostile, belligerent, and dangerous regime is not possible. First, China violated its promise to remove all "the non-tariff countermeasures taken against the United States since April 2, 2025." Among those countermeasures is the April 4 prohibition of export of magnets and certain minerals to the U.S., which is still in place. CLICK HERE FOR MORE FOX NEWS OPINION Then, the Communist Party, through the semi-official Global Times tabloid, signaled it would not by the end of 90 days remove what Trump on May 12 called "all of its non-monetary barriers." Finally, on May 18, the Chinese central government upped the stakes, provocatively imposing a 74.9% anti-dumping duty on U.S.-made POM copolymers, an industrial plastic. China's response to Trump's concessions was "blatantly dishonest," Charles Burton, also a former Canadian diplomat in Beijing, said. "Bad faith bargaining is the Communist Party's stock-in-trade," he added. "Trump's comments to Bret Baier show that the president let up on China at exactly the wrong time," Tonelson pointed out. Trump had leverage and gave it up. China then went on the attack. CLICK HERE TO GET THE FOX NEWS APP So, what should President Donald Trump do now? "The first thing is to walk away from China's mendacious interactions," Burton advises. "Rescuing communists never works." 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Fox News
17-04-2025
- Business
- Fox News
GORDON CHANG: Trump tariffing China at the worst possible time for Xi Jinping
"There are no winners in a trade war or a tariff war," wrote Xi Jinping this week. If he's talking about China, he's absolutely right. Across the board, the Chinese will suffer. In America, the story will be different. When the dust settles on President Donald Trump's tariffs, there will be 340.1 million people much better off. For more than four decades, China's regime has been implementing predatory and criminal trade practices. For various reasons, the U.S. and other countries have let matters slide. Trump in his first term, in 2018, fired a warning shot with his 25% tariffs. Unfortunately, the Chinese regime did not take the hint. This month he raised the general tariff rate on China's goods to 145%. Trump's trade actions could not have come at a worse time for Xi. As an initial matter, his economy is stumbling. It cannot be growing at the 5.4% pace reported Wednesday for the first quarter of this year. Price data for March – the Consumer Price Index was negative for the second-straight month and the Producer Price Index was negative for the 30th-straight month – indicates the country has entered a deflationary spiral. That phenomena suggests the economy is now contracting and will do so for some time. And it's going to get worse. Xi Jinping, despite what his technocrats say, does not want consumption to form the foundation of the Chinese economy. In fact, consumption's share of gross domestic product – an abnormally low 38% last year – is now falling. In these circumstances, Xi's only way to rescue an increasingly grim situation is to export more. Yet Trump's elevated tariffs close off the U.S. market to most Chinese goods. The U.S. accounts for more than a third of global consumer spending. Worse for Xi Jinping, Trump's tariffs are helping end the fast globalization that has marked the post-Cold War period. "Due to many reasons, the world has been deglobalizing for years," trade expert Alan Tonelson told Fox News. "Now, the Trump Liberation Day tariffs are greatly speeding up the process, and further threatening the well-being of the People's Republic of China and other export-led economies." As Tonelson, who blogs on trade at RealityChek suggests, the world is de-integrating. "The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades," wrote Larry Fink in his March 24, 2022, letter to BlackRock shareholders. The world's largest asset manager – BlackRock has $11.6 trillion under management – suggested the Ukraine war killed globalization because globalization had already been weakened by the COVID pandemic, which had lessened connectivity among nations, among companies and among people. In this deglobalizing world, other countries will not allow China to flood their markets with goods the Chinese would have otherwise sold to America. Those markets are not large enough to absorb those goods and, in any event, they will not permit China to decimate their local industries. China will be hurt. Even now, export factories in southern China, with nothing in their order books, are closing. Workers have begun to return to hometowns, many to subsist on farms. The downturn in the export sector is occurring while the country is essentially having its 2008. In 2008, Hu Jintao, Xi's predecessor, decided to avoid a downturn by embarking on what was then the biggest stimulus program in history. In the process, China took on an enormous amount of debt. Today, China's total-country-debt-to-GDP ratio could be as high as an unsustainable 375%. As a result, there have been for four years a series of high-profile debt defaults, especially in the property sector. Prices of flats in China have tumbled, a social stability issue: Approximately 70% of household wealth is in property. And if all of this were not bad enough, Trump has picked this moment to begin challenging China's mighty export sector with tariffs. The obvious course of action for Xi Jinping would be to pick up the phone to call 1600 Pennsylvania Avenue. He has, however, made it clear that he won't be doing that. "China wants to make a deal," Trump said last Wednesday. "They just don't know how quite to go about it." No Xi Jinping doesn't. And it's not hard to figure out why something so easy is in fact so hard. Xi has configured the Chinese political system so that only the most hostile answers are considered acceptable. As a result, he cannot now back down or make concessions for fear that will lead to a challenge to his leadership. There are already signs of discontent with his rule, especially in the top ranks of the military. Xi remains intransigent. "China does not flinch from any unjust suppression," he proclaimed during his meeting with visiting Spanish Prime Minister Pedro Sanchez on April 11. So Xi has boxed himself in. For him, there are no good outcomes. If he does not compromise, the Chinese economy will fail. If he compromises, he will fail. For China's willful leader, the choice is easy: He will not initiate talks with Trump. China, as a consequence, will bear the consequences.
