Trump turns up trade pressure on China after Beijing fails to come running

When President Donald Trump threatened tariffs on Canada, Mexico and China in January, saying those countries needed to do more to stop the flow of drugs and migrants into the United States, Canadian and Mexican officials raced to Washington, bearing charts and videos detailing their efforts to toughen their borders.

Canada created a “fentanyl czar” and committed fresh resources to combating organized crime, while Mexico dispatched troops to the border and delivered cartel operatives into U.S. custody. As a result, Trump paused tariffs on the United States’ North American neighbors for 30 days.

China never made these kinds of overtures and, in Trump’s view, did not take any big moves to stop the flow of fentanyl into the United States. So on Feb. 4, Trump moved forward with imposing a 10% tariff on all Chinese imports. Last week, the president said that on March 4 he would add another 10% on top of all existing Chinese tariffs.

Trump is moving quickly to transform the U.S.-China trade relationship. The Chinese are moving much more cautiously and deliberately as they try to assess Trump and determine what it is he actually wants from China. Some of Trump’s advisers, including Treasury Secretary Scott Bessent and Secretary of State Marco Rubio, have held calls with their Chinese counterparts. But a call between Trump and Xi Jinping, China’s leader, has failed to materialize.

The situation underscores the quandary for foreign leaders in dealing with a president as unpredictable and unconventional as Trump, who is making substantial changes to trade terms with little advance notice or preparation.

The Chinese do not want to initiate a conversation because they do not want to be seen as pleading, and are wary of offering concessions before they understand the parameters of the debate, people familiar with the discussions said. Instead, Chinese officials, academics and others close to the government have been holding discreet conversations to try to determine Trump’s motives, while floating various aspects of a potential trade deal between the countries to assess the Americans’ reaction.

“With my experience with the Chinese, they are suspicious in the initial rounds of a negotiation that there are hidden traps or other reasons to be cautious,” said Michael Pillsbury, a China expert who advises the Trump administration on dealing with the country.

The Chinese side has conveyed they would like to work with the United States on mutually beneficial measures. But they have been struggling to identify people in the United States that they see as reliable channels for communication, according to a person close to the Chinese government.

They are also trying to assess the significance of some recent steps by the administration, like a memorandum that proposed strict limits on investment between the countries. Trump publicly contradicted that memo days after he signed it, saying he welcomed Chinese investment.

“I think the Chinese are in a wait and listen mode,” said Myron Brilliant, who has spent years working with businesses to understand the Chinese and recently returned from a trip to China. “They’re taking in all kinds of input, they’re beginning their consultations, they’re not pushing the panic button just yet.”

“There is a willingness, an appetite to do a deal with the Trump administration, but China doesn’t want preconditions on that, and seeks more clarity on the parameters of a deal,” said Brilliant, a senior counselor at DGA-Albright Stonebridge Group, an advisory firm.

In late February, a delegation including Cui Tiankai, the former Chinese ambassador to the United States, met with representatives of think tanks in Washington, according to more than half a dozen people familiar with the discussions.

Over meetings and dinners, the Chinese delegation conveyed hope that the countries could reach an accommodation, and floated ideas for a potential trade deal, including significant purchases of American agricultural products and Chinese investment in the United States, several people said.

They called for treating China as an equal partner and criticized past measures taken by the Biden administration to “contain” China, like export controls. The delegation also threatened that, if further U.S. tariffs went into effect, China could withdraw a law enforcement package that it had put together to combat the fentanyl trade, which included information that could be used to prosecute Chinese companies, one of the people said. They acknowledged that the Chinese economy was struggling and that more tariffs could hurt it.

Current and former advisers and others familiar with Trump’s thinking say he has expressed interest in striking a wide-ranging deal with Xi, which could involve Chinese purchases and investment, as well as cooperation on issues like nuclear security.

But Trump also believes that China reneged on the deal he signed with it in 2020 by not purchasing enough products. Trump also has no aversion to ramping up the pressure on Beijing by imposing tariffs, seeing them as a source of leverage in negotiations.

Trump has said he has a great relationship with Xi and would like the Chinese to invest in the United States. When asked in February if he would do a trade deal with China, Trump responded, “It’s possible.”

“We did a great trade deal with China,” he said. “The problem is that Biden didn’t push them to adhere to it.”

Beijing has so far been cautious in retaliating, answering Trump’s first volley of tariffs with a more limited number of its own. But it has signaled that it is willing to go further, possibly using its dominance in the global supply chain to exact pain.

Privately, the Chinese have indicated a willingness to start negotiating a deal but want to know that they have direct access to Trump.

“There seems to be a sense that Beijing is blaming what has happened on the poor communication channels,” said Yun Sun, the director of the China program at the Stimson Center, a research group in Washington.

Chinese academics and think tank officials have begun floating various ideas for a trade deal. One proposal is for the Chinese to make major investments in the United States in areas like electric vehicles, batteries and solar panels, which could create an estimated 500,000 U.S. jobs, according to one person with direct knowledge of the proposal. In an unusual move, Chinese companies would be willing to license technology to American partners and hold minority stakes in ventures to mitigate national security concerns, the person said.

Another tentative offer is the purchase of goods and services from the United States in agriculture, aerospace, energy and possibly even technology. The Chinese have also suggested buying more U.S. Treasuries, and honed in on a concern Trump recently voiced about a move by a handful of nations, including China and Russia, to create a new reserve currency, threatening the U.S. dollar. The Chinese have proposed Beijing could stand down on that effort.

Chinese diplomats and academics have indicated that Beijing might also help the United States achieve a deal between Russia and Ukraine and assist in Ukraine’s reconstruction.

In return, the Chinese have suggested that the United States should commit to stabilizing the economic relationship. That could mean refraining from further tariffs and technology controls, and allowing more Chinese investment in the United States.

This article originally appeared in The New York Times.

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