Take Two!

So, It's All About China?

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These are remarkable political times we’re living in. I was live on Newsmax, with John Bachman, when the news broke of Trump’s decision to issue a 90 day pause on the reciprocal tariffs. My first reaction was this is good for America…and, my second reaction, Trump blinked. The pain was too great - in the bond market, on Capitol Hill, and on Main Street.

What followed on X would have made Baghdad Bob proud, as MAGA spun the news as a strategic, calculated move straight out of The Art of The Deal. Of course, Trump, who often says the quiet part out loud, then proceeded to undercut the chorus. By late afternoon, a new narrative had taken hold: all of this is really about China.

There is legitimate bipartisan concern across the country with China. Ever since being admitted to the World Trade Organization in 2000, they have methodically and repeatedly stolen companies and government’s intellectual property, skirted regulatory commitments, manipulated their currency, unfairly subsidized domestic industries, and become a manufacturing haven of everything from textiles, to technology, to pharmaceuticals. Hundreds of thousands of US jobs were lost in the process. At the same time, China bought our debt, and thousands of US-based companies sold goods and services to China’s massive market.

As China asserts itself as a global super power, our two countries have been on a collision course, with the likely economic decoupling inevitable. The question therefore is how do you achieve this?

The most obvious way to decouple and isolate China would be to partner with its neighbors, such as Japan, Vietnam, South Korea, and Malaysia, while also aggressively courting countries such as Canada, which do a tremendous amount of business with China. Together, you would incentive countries to work with us, offering them economic and military benefits. If you want someone to dance with you, smile, engage in friendly conversation, and then ask. But what Trump has done in the last few days, and, in the instance of Canada, since assuming office again, is smack these countries around to fix what he perceives as wrongs, mainly, trade imbalances - though we have a surplus with Canada.

To many of our longtime allies in Asia and elsewhere, Trump appears unpredictable, unreliable and unfriendly. Rather than flirting, he is intimidating and hoping to browbeat into submission.

Perhaps Trump will prove successful and, at the end of the day, these countries will decide they prefer doing business with America and partner to help vs China. As an American always rooting for our country, I sure hope that’s the case. But my worry is that Liberation Day did not help. In addition, Trump folding so quickly and openly saying why offered China a roadmap.

These are amazing political times. Hopefully the second attempt swinging the tariff hammer ends better than the first.