Bulwark Takes - China's Xi Leaves Trump on 'Read' In Tariff Staredown

Episode Date: April 12, 2025

Andrew Egger breaks down the phone call stand off as Donald Trump waits for President Xi to make the first move with tariff negotiations.

Hi guys, this is Andrew Egger with The Bulwark. I'm here to talk Donald Trump's one strategy trade war, one card to play, and how it's kind of landing with a thud against the single country that's emerged as its primary target, which is China. So Trump, as we all know, he's a guy who loves tariffs more than anybody else alive. I always say tariffs is the most beautiful word to me in the dictionary. Then I was reprimanded by the fake news. They said, what about love, religion, and God? I said, I agree. Let's put God number one. Let's put religion number two. Love, I don't know. I got to put that number three, I guess, right? And then it's tariff. They're basically that old SNL skit for him. It's both a floor wax and a dessert topping. For Trump, tariffs are a tool for protecting U.S. manufacturing and growing the economy and a cheat coat for bringing in tons of revenue and a deadly weapon for him to use to boss other nations around.

He has made them pretty much the only tool in his diplomatic arsenal in this second term. If another country isn't doing what Trump wants them to do, he's going to slap on some tariffs or he's going to threaten to slap on some tariffs. Now, it is true. He had to back off his massive Liberation Day tariffs on the entire world that he announced last week after just a few days for the simple reason that they were about to crash the entire global economy. Why you decided to put a 90 day pause? Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know,

they were getting a little bit yippy, a little bit afraid, unlike these champions, because we have a big job to do. No other president would have done what I did. No other president. I know the presidents, they wouldn't have done it. But he's tried to save face on that flip flop by acting as if he didn't back off the trade war. He's just refocusing it on China. China, after all, was the country that had stepped forward to quickly retaliate against Trump's tariffs by slapping on new tariffs of their own. Over the weekend, Trump posted China played it wrong. They panicked. The one thing they cannot afford to do. China has been hit much harder than the USA, not even close. They and many other nations have treated us unsustainably badly. So you fast forward then to last Wednesday, when the same moment he took his foot partially off the neck

of most of the rest of the world, he pushed down harder on China. He raised their tariff rate to 135%, which is, you know, for most intents and purposes, a functional embargo on the world's second largest economy. Now, it seemed pretty clear at that moment that Trump thought that 135% tariff, it's a pretty big tariff, it would be enough to cow the Chinese into backing down. He said Wednesday, China wants to make a deal. They just don't know quite how to go about it. China wants to make a deal. They just don't know how quite to go about it. He said, you know, they're a proud people. You know, it takes a little bit of encouragement to get to get China to see the light on this stuff. They're proud people. And President Xi's a proud man. I know him very well. And they don't know quite how to go about it, but they'll figure it out.

But China has not reacted the way Trump expected. They just doubled down with correspondingly massive new tariffs of their own a day later. Chinese President Xi said they aren't going to be intimidated. He said for over 70 years, China's development has relied on self-reliance and hard work, never on handouts from others, and it is not afraid of any unjust suppression. So all this seemingly has Trump basically just flailing. I mean, it cuts against his entire self-conception of how these things are supposed to go. He's supposed to be the alpha dog in these trade negotiations. He's supposed to be the one who brings the pain. Other nations are supposed to be the ones who then come hat in hand to heap gifts upon him to regain his favor. We've been getting some genuinely

pretty funny reporting from CNN today about how US officials keep wheedling their Chinese counterparts to please get Xi to pick up the phone and call Trump. Trump isn't going to call Xi, that would be too beta. But apparently, begging the other guy to be the beta in these official diplomatic channels is not considered by the White House to itself be kind of a beta move here. And I say it's funny. It is. It is funny. It is funny. But at the same time, we should not sugarcoat China here. We should not be tempted to indulge in enemy of my enemy thinking here just because, you know, of all of our feelings about about Donald Trump and how pointless all of this is. I mean, it is 100 percent true that China is a bad actor on the world stage. Just full stop.

It's an autocratic, oppressive regime. It spends lots of time trying to make all of our global institutions indulge it in all of its own autocratic, oppressive whims. It is not a good player diplomatically, internationally. But at the same time, while a massive trade war is going to inflict major pain on both us and them, both the US and China economically, there are a lot of reasons to be skeptical that it will do anything to diminish the Chinese Communist Party presence or sway either at home among the Chinese people or on the world stage. You could imagine a world where the U.S. tried to lead an international cooperative effort among our allies to decouple from China economically and isolate Beijing internationally. Instead, Trump is still out here picking individual trade fights with

practically every country on earth. He's taken off the extinction event tariffs, but he still has, you know, a baseline 10% new tariff on everybody with, you know, prospect of more to come after this 90 day pause. Although obviously not to the same degree as China. Again, that 135% tariff on China is unique at this point. So, I mean, if anything, you could make the argument that Trump is pushing the rest of the world closer to China right now by abdicating America's position as the consensus economic and military leader of the free world, making trade with the US far more expensive for everybody else. One really kind of shocking example of that that came out this week is that the EU and China announced an economic thaw in the form of

negotiations on lifting EU tariffs on Chinese electric cars, which has been a huge, I mean, that is a real red flag. The EU, Europe in general, historically has not wanted Chinese cars to come flooding into their market. They want to prop up EU auto manufacturers. But, you know, we're now seeing as at exactly the same moment that America steps back in this role, you know, other people essentially saying, okay, I guess maybe we have to trade more with China now to kind of make the whole economic picture make sense. Meanwhile, as far as the domestic picture is concerned, Trump has given Xi the sort of gift that an autocrat like him loves. He's given him an enemy abroad on which he can focus the domestic animus, the kind of

ire of his own people over how their economy is doing. China's economy has not been so hot lately on its own merits. And that is a situation which that's been reported, you know, has led to and could easily continue to lead to rising pressure on China's political leadership on Xi himself. But now, you know, Xi has a ready scapegoat at hand. It's Trump and his aggressive tariffs. That's the reason he can say that the Chinese economy is not doing as well as it otherwise could be. That's the reason why there's economic pain. Again, it is going to be the reason why there's some economic pain. But it also lets Xi package this as good pain to a

certain extent for his people to say, yeah, we're going to suffer. But the reason we're going to suffer is because we're not going to let Donald Trump and the Americans walk all over us. We're too proud to do that. And in that way, he has this outlet to relieve a lot of that pressure on himself, even at home, both internationally and at home. So what's the endgame here? We don't know. We don't really know. Donald Trump has, again, this one weapon, and it's ratcheting tariffs up higher.

Tariffs are already basically at the point where they are going to foreclose on all but the tiniest fraction of U.S.-China trade going forward until there's a thaw. It's not like raising the rates. I mean, you could raise the rates to 5,000% at this point in sort of daily 10% increments, and it wouldn't be any different. It would not be an actual new source of real diplomatic leverage in any way whatsoever. Meanwhile, Donald Trump doesn't seem to actually want to pick up the phone and call. He's waiting for Xi to do that. Xi doesn't seem too enthused about doing that himself. So we're at a complete standstill here. I guess the White House is just going to keep tinkering with all of the other individual trade deals. Maybe, you know, I guess the best case scenario you could envision is that we come out the end of this 90-day pause. We get this miraculous face turn from Donald Trump where he decides that these other countries have given him enough

concessions that we're going to be basically free trading with the rest of the world now. And then, you know, you could maybe see this turn to actually trying to isolate China or have China fear that and be willing to take down some of these barriers, have China blink first, let Trump take the win, let Trump plant the flag, let some of these tariffs come back down. In the meantime, though, we are looking at basically an entire decoupling of our two economies, the two largest economies of the world, us and our third largest trading partner, the US and China, with a lot of pain to go around on both sides and absolutely no endgame insight. So we'll keep an eye on all this stuff. We'll keep bringing

it to you.