Trump's Tariffs on China Are Stiffening China's Resistance

Trade negotiations between China and the United States are deadlocked, for a unique reason - the two countries are negotiating over and around each other. President Trump’s concern is exclusively economic. But not everyone is homo economis. President Xi’s concern, or at least the concern of Chinese nationalists, is overwhelmingly based on a desire for national dignity and respect.

The two countries’ trade strategies are both flying beneath each other’s radar, inadvertently pursuing stealth trade attacks. This chasm in priorities helps to explain why Trump’s attempts to ratchet up pressure on China by piling tariff upon tariff has not borne measurable results thus far. Every time Trump increases tariffs on China, it has the opposite effect from what he intends, just stiffening resistance. From China’s point of view, it is not just a matter of losing economic ground, but losing face.

The two sets of national goals - utilitarian and cultural - are in this case difficult to resolve. With Trump in the White House, the U.S and China are two ships of state passing in the night, in some ways out of each other’s sight. The President’s goal is easy to see (even if his specific demands are nebulous and in continual flux)
Trump has spoken frequently of a determination to increase exports and reduce imports, rebalancing trade between the two countries in order to eliminate what he sees as a troubling deficit in bilateral trade.

China’s priority is more difficult to discern. But it is actually out there in plain view. China’s leaders have been flashing the red light on what they see as an American threat to Chinese nationalism, seeking to eliminate what they see as a worrisome deficit in national respect. The Chinese people’s sense of aggrievement largely explains Beijing’s refusal to step back from a potentially devastating trade war, instead launching retaliatory tariffs of its own.

This concern stems from the Opium Wars and the feelings of national humiliation it prompted. The fact that Trump imposed $200 billion in sanctions on China on the anniversary of Japan’s 1931 invasion of northern China only intensified the nationalist reaction.

While China’s leaders have been relatively tight-lipped about expressing concerns about deterring national humiliation, they have subtly let their views be known – largely through state and Communist Party media.

“The United States’ intention to disrupt China’s development has been thoroughly exposed,” reported the state People’s Daily. A signed commentary in the People’s Daily said the “behind-the-scenes logic is pretty clear - it is never just about narrowing trade deficits, but to contain China in much broader areas.” Another signed commentary in People’s Daily said the United States is seeking hegemony, and China should be determined to fight.

Attacks on China’s approach are an attempt to shape “public opinion to curb ... China’s development,” says Qiushi, the Communist Central Committee’s publication.

In a sense, both Mr. Trump and Mr. Xi are pursuing the same things, but their goals are flipped. Trump seeks respect - both for himself and for the United States as an extension of himself - but he sees it as a means of achieving the ends of financial and economic goals. Xi, and Chinese leaders for decades, have been pursuing the very opposite path - seeking economic growth as a means of commanding global respect.

Trump and China are essentially condemned to a trade war in which they define victory very differently. Both may see triumph in sight – soon or much further down the road – but they do so on entirely different battlefields, even theatres, never to truly engage. As a result, Trump - by failing to recognize what China is actually seeking - is engaged in a sisyphean task, continuously rolling the tariff boulder up the wrong hill.