US looks to box in China by recruiting other trading partners
Dozens of nations are seeking reductions or exemptions from US President Donald Trump’s historic import taxes
[WASHINGTON] The Trump administration is preparing to pressure nations to curb trade with China in negotiations over US tariffs, according to sources familiar with the matter.
Dozens of nations are seeking reductions or exemptions from US President Donald Trump’s historic import taxes. In exchange for doing so, the US is set to ask them to take steps limiting China’s manufacturing might, a bid to ensure Beijing does not find avenues around Trump’s tariffs.
Trump’s top economic advisers are discussing asking representatives from other nations to impose so-called secondary tariffs, essentially a monetary sanction, on imports from certain countries with close China ties, according to a source familiar with the process. The US also wants trading partners to refrain from absorbing excess goods from China, other sources said. Other concessions on China may also be put on the table.
Mexican officials are expecting the US to ask their country to increase tariffs on electric vehicle (EV) imports from China, according to a source familiar with the government’s thinking. Mexico’s economy ministry declined to comment.
The White House did not immediately respond to a request for comment.
The push amounts to an effort by Trump’s team to harness longstanding partners to encircle China and raise pressure on Beijing to change its economic practices. It’s unclear if that strategy will bear fruit; some foreign officials have come away from early US discussions with doubts about the likelihood that tariff deals get done.
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Trump himself floated the idea this week in an interview with Fox News’ Spanish-language arm, when asked if he would force Latin American countries to choose between China’s Belt and Road Initiative and US investment.
“Maybe they should do that,” he said.
The president has become personally involved in negotiations with other nations. He said he would sit in on talks on Wednesday (Apr 16) with a Japanese delegation.
Among the loudest proponents of the idea is Treasury Secretary Scott Bessent, who is playing a lead role in talks after Trump last Wednesday announced a 90-day pause on higher tariffs on roughly 60 trading partners except China.
“They have been good military allies, not perfect economic allies,” the former hedge fund manager said last week of some traditional American partners. Bessent expressed optimism about reaching agreements and “then we can approach China as a group”.
China has long been a target of Trump and his predecessors over its trade imbalance, alleged intellectual property theft and government subsidies, the US says undercut competition with American companies. Even after Trump temporarily suspended higher tariffs on other nations, he ratcheted up his newest levies on China to 145 per cent in a tit-for-tat with Beijing.
But Trump and his team have sent conflicting signals about what their end goal is with China. The president has long called Chinese President Xi Jinping a friend and he has held out the possibility of brokering a tariff deal.
“The ball is in China’s court. China needs to make a deal with us. We don’t have to make a deal with them,” White House Press Secretary Karoline Leavitt said on Tuesday, reading what she said was a statement Trump dictated.
China wants to see a number of steps from the Trump administration before agreeing to talks, including refraining from disparaging remarks, a more consistent US position and a willingness to address Chinese concerns on US sanctions and Taiwan, according to sources familiar with Beijing’s thinking. The Chinese government also wants Trump to appoint a trusted point person for negotiations.
For Trump’s encirclement plan to succeed, he would need buy-in from nations in Europe and Asia that have been reluctant to drastically curtail dealings with China. Trump’s decision to ratchet up tariffs on friend and foe alike has also caused some foreign capitals to no longer see the US as a reliable ally.
Any effort to limit Beijing could spill into talks concerning South-east Asian countries that administration officials have accused of functioning as an extension of Chinese manufacturing might. Nations such as Vietnam, Cambodia, Malaysia and Thailand have facilities that serve as final assembly points for products made with Chinese components, including solar panels.
Peter Navarro, Trump’s trade counsellor, has said China ships goods through Vietnam to dodge tariffs through a practice called transhipment, calling the nation “a colony of communist China”.
“On our side, we want to avoid transhipment, which has been a big problem. And then on their side, I think they want to avoid dumping. Because these Chinese goods are going to end up somewhere. I don’t think it’s gonna take much prodding if their biggest export market’s cut off,” Bessent said this week.
Cracking down on China also has not proved to guarantee mercy on tariffs. Trump hit Canada with 25 per cent and 10 per cent duties tied to fentanyl trafficking and migration earlier this year, even after Ottawa announced steps to tighten security at its border with the US and put tariffs on Chinese EVs and steel and aluminium.
Whether the parties can even reach bilateral agreements on tariff levels is also in question.
The European Union and the US made scant progress towards resolving trade differences in discussions this week, as Trump’s advisers gave the impression that the bulk of the 20 per cent tariff imposed on the bloc will not be removed, according to sources familiar with the talks.
Bessent last week warned the EU against pivoting towards China amid the global economic chaos unleashed by Trump’s tariffs, singling out the Spanish government’s endorsement of that approach, saying it “would be cutting your own throat”.
Spanish Economy Minister Carlos Cuerpo rejected that characterisation, saying it was important for Europe to maintain relations with all the world’s major powers. China must be a “strategic partner” for the EU, he told reporters Tuesday after meeting with Bessent. BLOOMBERG
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