US is planning to isolate China globally through tariff negotiations
The United States is strategizing to leverage tariff negotiations as a means to isolate China in the global market. The Trump administration is reportedly leveraging ongoing tariff negotiations as a strategy to compel U.S. trading partners to restrict their engagements with China, as indicated by sources familiar with the discussions. The strategy involves securing commitments from U.S. trading partners aimed at isolating China’s economy, in return for easing trade and tariff barriers implemented by the White House. U.S. officials are set to engage in negotiations with over 70 nations, urging them to take measures against allowing China to transport goods through their territories. The discussions will also focus on preventing Chinese companies from establishing operations within their borders to circumvent U.S. tariffs, as well as discouraging the integration of China’s low-cost industrial products into their economies.
The measures aim to impact China’s fragile economy and compel Beijing to engage in negotiations with diminished leverage as potential discussions between Trump and Chinese President Xi Jinping approach. The specific demands are likely to differ significantly from one nation to another, influenced by their level of engagement with the Chinese economy. U.S. officials have initiated discussions with several countries regarding a potential idea, according to sources familiar with the matter. On Tuesday, Trump indicated a potential strategy during an interview with Fox Noticias, suggesting he might require countries to choose between aligning with the U.S. or China. This remark came in response to a question regarding Panama’s decision not to extend its participation in the Belt and Road Initiative, China’s ambitious global infrastructure program aimed at developing nations.
Treasury Secretary Scott Bessent has emerged as a key figure in shaping the strategy, actively participating in trade negotiations following President Trump’s announcement of a 90-day suspension of reciprocal tariffs for most countries, with the exception of China, on April 9. Bessent presented the proposal to Trump during a meeting on April 6 at Mar-a-Lago, according to sources familiar with the conversation. The discussion centered on the notion that securing concessions from U.S. trading partners might deter Beijing and its companies from circumventing U.S. tariffs, export controls, and other economic strategies, the sources indicated.
The approach is a component of a broader strategy advocated by Bessent aimed at isolating the Chinese economy, a move that has recently garnered support among officials in the Trump administration. Discussions surrounding the extent and impact of U.S. tariffs continue, yet officials seem to largely align with Bessent’s strategy regarding China. The strategy entails imposing tariffs to sever China’s ties with the U.S. economy, along with the possibility of excluding Chinese stocks from U.S. exchanges. Bessent indicated that the administration may consider delisting Chinese stocks during a recent interview with Fox Business. The clarity of the administration’s ultimate objective regarding its China policy remains elusive.
Bessent has indicated that discussions regarding a potential trade agreement between the U.S. and China remain open. Discussions of this nature would necessitate the participation of both Trump and Xi. During Tuesday’s press briefing, White House Press Secretary Karoline Leavitt conveyed a new statement from former President Trump, indicating that a deal with China is not expected to materialize in the near future. “The responsibility now lies with China.” China must engage in negotiations with us. There is no necessity for us to enter into an agreement with them. According to Leavitt, while discussing Trump’s statement, “China is seeking to tap into the American consumer market.”
The extent to which the anti-China stance has been integrated into negotiations with various nations remains uncertain. Sources indicate that certain nations have yet to receive requests from U.S. negotiators concerning China, although they recognize that discussions are still in the preliminary phases. Analysts anticipate that the Trump administration will inevitably escalate its demands concerning China in the near future.
Bessent has previously expressed his interest in securing anti-China commitments from U.S. trading partners. In late February, it was reported that Mexico proposed to align its tariffs on China with those of the United States. This move comes amid ongoing negotiations regarding the tariffs imposed by Trump on Mexico, which were instituted in response to the fentanyl trade. Bessent characterized Mexico’s proposal as a “nice gesture,” yet it failed to gain significant support within the administration. Bessent has since assumed a pivotal position in trade negotiations, leading discussions on reciprocal tariffs following Trump’s announcement of a 90-day pause on April 9. The Treasury Secretary is scheduled to engage with Japan’s Economic Revitalization Minister as early as Wednesday. He has outlined a roster of countries he anticipates may soon finalize agreements with the United States, which includes Japan, United Kingdom, Australia, South Korea, and India.
China is actively engaging in its own trade diplomacy efforts. This week, Xi made a significant visit to Vietnam, a key trading partner of the United States that has faced challenges due to tariffs imposed during the Trump administration. During his trip, he signed numerous economic agreements with the Hanoi government. During a panel discussion at Georgetown Law on Tuesday, Peter Harrell, the former senior director for international economics on Joe Biden’s National Security Council, indicated that China perceives Trump’s reciprocal trade strategy as a potential opportunity.
According to Harrell, China’s capacity to respond to U.S. trade policies is constrained. The United States continues to be a significant net importer, whereas China is strategically decreasing its imports from global markets and prioritizing self-sufficiency. According to Harrell, China is unlikely to supplant the United States as a primary source of demand for the products manufactured by numerous developing nations. “The economic landscape presents significant challenges for China; however, their political maneuvering appears to be quite strategic.”
