China Hands Should Enthusiastically Support Trump’s Tariffs

Democratizing China was a failed promise; time for something new

Opinions about President Trump’s efforts to rebalance international trade and isolate communist China are legion. Some characterize the resulting policy shift to isolate communist China as brilliant and long overdue while others call it economic malpractice.

One’s point of view often depends on whose ox is being gored. Those who have long questioned the US policy decisions over the years that facilitated China’s rapid development and modernization – and the subsequent rise of Chinese mercantilism and the People’s Liberation Army, America’s growing dependency on Chinese-produced strategic minerals and pharmaceuticals, and the decline of US manufacturing offshored to communist China – believe that a Chinese reset is essential and a US national security imperative.

On the other hand, those who have made careers out of (and benefited personally from) China engagement – whether diplomats, academics, politicians, or business people – believe that US-China policy should return to that of engagement, or at least “friendly competition.” These people have come to be categorized over the decades as “China hands.”

What has history taught? Let us examine the topic.

CHINA HANDS

American involvement in China was jump-started by Christian missionary work. During the Third Great Awakening (1855-1930), a period of maximum Christian activism in the United States, China was one of the countries targeted by American missionaries as part of a worldwide campaign that promoted Christianity and social change to non-Christian peoples.

In the first decades of the 20^th century, that involvement grew on the political-military front, particularly after Pearl Harbor was attacked by the Imperial Japanese Navy in December 1941. The US and China formed an official wartime alliance in 1942, and the US provided considerable material support to China throughout the war – including through an extension of credits to the Chinese government.

Members of the US diplomatic corps in China, as well as journalists, missionaries, businessmen, and others with lengthy direct experience in China, came to be known as “China hands.” They were the modern-day equivalent of experts who influence US policies through congressional testimony and public persuasion – in this instance, those who helped steer US-China policy through the war years and beyond.

Some of those early China hands, such as the journalist Edgar Snow and scholar Owen Lattimore, were sympathetic to the new Chinese Communist Party in much the same way that other Americans, such as John Reed and Walter Duranty, were sympathetic to the new Communist Party of the Soviet Union. Captured by the siren song and the grandiose promises of communism before the genocides and purges became public knowledge, they admired the communists’ early focus on land reforms, a complete societal restructuring, and that old saw that continues to this day in Xi’s China: “fighting corruption.” Some believed that socialism would deliver everything its theoreticians promised, and that China would lead the way to that future.

At least partially influenced by pro-China engagers, in 1972 Richard Nixon became the first US president to visit China after the CCP had established a “people’s republic” (sic) at the end of a hot civil war in 1949. Most observers have concluded that his main purpose was to open a new front in the US-Soviet Cold War that was raging at the time – the leveraging of communist China as a counterbalance against rising Soviet power and influence in Asia and elsewhere.

There were others who had different agendas. Some believed bringing China into the global community would expand trade opportunities for the US and help “democratize” China and soften Maoism. Others believed that worldwide implementation of socialism with Chinese characteristics was the inevitable future of mankind and thus worked to psychologically promote and make that a reality, especially in the US. Still others descendant from the missionary strain of old China hands thought that “opening China” would result in international pressure on the CCP to end the persecution and cultural genocide of minority groups while improving the basic human rights of average Chinese citizens. With the exception of the pro-CCP fifth column motivations, these were all reasonable goals. Unfortunately, the necessary cooperation from the CCP to achieve those ends did not happen. Quite the contrary!

Nixon’s diplomatic breakthrough laid the groundwork for all that followed, including what many China hands have dubbed the “Chinese miracle” that has elevated China to the second-largest economy in the world. Thanks to decades of engagement cheerleading from the US-China Business Council and many other China hands, the West has been financing the CCP through the WTO and World Bank. As Statista points out: “China’s manufacturing output climbed from roughly $134 billion in 1980 to roughly $4.8 trillion in 2023. During that time, China’s share of global manufacturing output climbed from 5 percent to around 30 percent, while former manufacturing leader the United States saw its share drop from 21 to 17 percent.”

In retrospect, China got the gold while the rest of the world got the shaft, as the promises of “democratization” and tempering of CCP and PLA belligerence through free trade enticements did not materialize.

The communists selectively embraced free-market principles and pursued a mercantilist agenda that exploited access to the World Trade Organization and Most-Favored Nation status to their benefit. The communists perfected economic espionage, stealing an estimated $600 billion in intellectual property annually from the US alone. Persecution of minorities continued apace, with Uyghurs, Tibetans, Falun Gong practitioners, Christians, and other groups bearing the brunt of the CCP’s harsh methods. Organ-harvesting among persecuted minority groups was expanded. And the CCP showed their true intentions to the rest of the world through Belt-Road Initiative debt traps and the unprecedented modernization and use of the PLA as Beijing’s steel fist inside the velvet glove to intimidate other nations in order to achieve China’s geopolitical and economic goals and objectives.

To summarize, the hopes and dreams and predictions of those who advocated China engagement were almost completely dashed. More importantly, the China hands were proven to be flat-out wrong!

ENTER US RECIPROCAL TARIFFS

President Trump recognized over a decade ago that continuing the US-China trajectory unchanged meant disaster for the US over the long haul. During his first term as president, he negotiated and signed a trade agreement in January 2020 aimed at rebalancing US-China trade and resolving systemic problems in China’s economic and trade regime that would help curb some of the more egregious Chinese mercantilist practices. China violated the terms of the agreement, and in addition to not purchasing the agreed-upon US products, China also failed to fully comply with commitments made on agriculture, financial services, and intellectual property rights. This led to an assessment by the Peterson Institute for International Economics and others that the negotiated multi-phase trade deal was largely a failure. China simply refused to honor its commitments.

Enter a new strategic approach aimed at isolating China and changing its behavior on the world stage. Trump’s reciprocal tariffs are designed to achieve fair and balanced trade with all US trade partners by mirroring the tariffs imposed against US products by any given country. The long-term goal is equal tariffs between the US and each country, but most particularly with China. What could be fairer than that?

The reciprocal tariffs are also designed to undermine China’s decades-long efforts to offshore production and supply chains to third countries like Canada, Mexico, and Vietnam to get around US tariffs and import regulations. Negotiations on eliminating non-tariff-related trade barriers such as quotas, import restrictions, arbitrarily restrictive product standards, inspection requirements/delays, quarantine requirements, etc., will also be the subject of any trade talks with China.

The big problem for China and much of the rest of the world is that most countries have implemented relatively high tariffs against US goods while the US has generally promoted free trade and low tariffs against imported goods. For example, Chinese tariffs on most US products in recent years have averaged around 20% (in violation of WTO provisions on free trade among MFN partners) while US tariffs on China prior to 2016 averaged about 3.5% (consistent with the average MFN rate among all US trade partners). The Trump administration seeks to correct that long-standing imbalance.

Given that the Chinese economy has been built on exports while exploiting MFN and other free trade provisions of the WTO, the communists have apparently miscalculated greatly that no American president would ever dare to confront Chinese mercantilism through reciprocal tariffs. The Chinese response to the additional tariffs proposed by on Chinese goods by President Trump has been to raise their own tariff rate to 34% and then to 125% in response to President Trump raising China tariffs to 145% while granting a 90-day pause to other countries who haven’t followed China’s lead in responding to US tariffs. Good luck with that!

CONCLUDING THOUGHTS

Evidence has accumulated over the last 50 years that the predictions of those who supported engagement with China were dead wrong. Communist China did not moderate its aggressive behavior after being brought into international institutions, and the free trade policies enabled the communists to build the second largest economy in the world, which funded a massive increase in the capabilities of the People’s Liberation Army.

Given that the engagement policies backed by China hands have clearly not worked – and indeed have subsidized and exacerbated the behavior that was to have been ameliorated by those policies! – one would expect cautious support for President Trump’s new approach to China (or at least grudging acknowledgment that the past policies have failed and a new approach is needed). Unfortunately, the China hands seem to be uniformly condemning any new approach to China. The following is a short list of China hands-oriented think tanks and non-profit organizations who have condemned reciprocal tariffs with respect to US-China trade: Brooking Institution, Council on Foreign Relations, Chatham House (UK), and Center for American Progress. All would apparently support a return to pre-Trump US-China engagement policies.

If these institutions (and many academics, former diplomats, pundits, and others) who support China engagement were genuinely serious about achieving the original vaunted goals that sold opening China to the American people in 1972, why aren’t they willing to admit failure and try a new approach? The question answers itself.

The end.