Trump's tariff threats are increasingly more bark than bite

Note: The following is an edited translation of a commentary from the Chinese-language "Commentaries on International Affairs."

President Donald Trump has told his top trade official Robert Lighthizer to look at raising proposed tariffs on 200 billion U.S. dollars of imports from China to 25 percent, up from the 10 percent rate his administration has been mulling.

President Donald Trump listens during a campaign rally at Florida State Fairgrounds Expo Hall, Tuesday, July 31, 2018, in Tampa, Florida. [Photo: IC]

Seeing the reaction from different parties, however, the White House may be a little disappointed. Trading on American equity markets remained stable after the White House issued its statement about the proposal. And mainstream media in the United States has covered the new trade threat as if it was nothing significant.

The current scenario could be a reminder for people of a well-known story from Aesop's Fables. A shepherd boy tending his flock near a village thought it would be fun to play a trick on villagers by pretending that a wolf was attacking the sheep. So he shouted out, "Wolf! Wolf!" and when people came running he laughed at them. He did this again and again, until one day a wolf really did attack. But his cry for help no longer worked, because the villagers had gotten used to his lies.

The Trump administration is a bit like the shepherd boy. The American president first threatened to impose tariffs on 50 billion U.S. dollars' worth of goods from China in March. It wasn't long before he issued a threat on another 200 billion U.S. dollars. Then a couple of weeks ago, he went a step further by threatening to target 500 billion U.S. dollars of imports – an amount nearly equal to all China's exports of goods to the United States.

But the reality is that so far the government has only levied tariffs on 34 billion U.S. dollars of goods, and started working on tariffs on another sixteen billion U.S. dollars' worth. The first few trade threats to come from President Trump caused a lot of fear among observers and investors. But the latest threats have been met with little response.

The United States enjoys absolute advantages in terms of its economic strength, scientific and technological capability, and military power. Why would such a superpower continuously attack its allies and other countries? To put this behavior into perspective, you have to look at the political atmosphere in the White House.

President Trump is a successful businessman who vowed to "make America great again" when he was running for president. He brought the "art of the deal" approach he used in business to the White House. But the tricks and bravado that might work when it comes to closing a business deal don't work when it comes to managing international relations. By trying to run the United States like one of his personal businesses, President Trump has damaged the country's image and done a disservice to the American voters.

After heated competition that lasted for over a year, a group of hardliners led by Robert Lighthizer, the trade representative, and Peter Navarro, the director of National Trade Council, have taken the upper hand at the White House. According to a New York Times report, it was President Trump's hardline advisers who suggested imposing a 25 percent tariff on two hundred billion U.S. dollars' worth of imports from China. They believe that inflicting pain is the best way to force China to the negotiating table. President Trump has even invited Steve Bannon, his former chief strategist who turned against him, back to the White House to provide advice on an even tougher approach to the negotiations with China.

What are Lighthizer, Navarro, and Bannon trying to achieve from their trouble making against China? Lighthizer, who is known as the United States' trade tsar, is keen to repeat his success from the 1980s Plaza Accord negotiations between the United States, France, West Germany, and Japan. Navarro, the author of "Death by China", is eager to put into practice the hypotheses he has worked on for over a decade so he can silence those who criticize him for going extreme. And Bannon seems to be taking the opportunity to reach a new peak in his career by sweeping back into the White House to win the president over with his even tougher tariff policies.

These hardline and self-interested individuals are putting their own interests ahead of the interests of the American people. And in doing so, they reveal the underlying hypocrisy of the Trump administration, which is willing to recklessly resort to all possible means to achieve its goals.

Since launching its trade war against China in early July, the Trump administration has not made any substantial progress. Instead, by unilaterally provoking a trade war, what the Trump administration has done is harm the interests of the American people. The United States must have realized by now that China is unlike any opponent that it has previously taken on. China is not scared of this fight. If the United States repeatedly attacks China's national interests and the core interests of the people, China will take the necessary and legitimate countermeasures it needs to defend itself. China has consistently advocated resolving differences through dialogue, but dialogue must be premised on treating both sides as equals and on keeping to the promises made during negotiations.

At the same time that the White House is threatening China with tariffs, it is reportedly looking to go back to the negotiation table to settle its trade and economic disputes with China. The result is that the confusion being sown by the Trump administration has led to a loss of credibility on its part.

China, and the international community generally, has long realized that the increasingly hardline posture of the Trump administration had resulted in it having less and less support, and exposed its weak bargaining position. Given the tactics it has tried so far have failed, what is it going to try next?