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Trump is getting tough on China trade, but will his strategy work?

The U.S. has a $375 billion trade gap with China. Will President Trump’s tariffs targeted at China have their desired effect? William Brangham talks with Ian Bremmer, president and founder of the Eurasia Group, about the way U.S. should approach Trump’s trade policy strategically.

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  • Judy Woodruff:

    President Trump has long said he considers China a bad actor when it comes to trade with the U.S.

    Today, he took his biggest steps yet against the country, with a second wave of tariffs on Chinese imports. It comes as the U.S. trade imbalance with China keeps growing.

    Last month, the Commerce Department reported that the U.S. has a $375 billion trade gap with China.

    William Brangham is back now with a closer look at the potential consequences of today’s move.

  • William Brangham:

    Even as that trade deficit with China has grown, American exports to China have also grown. Last year, they rose to $130 billion.

    The president’s new taxes and tariffs could impact roughly 1,300 Chinese products. These are products we buy and wear and use every single day.

    But will these tariffs have the desired effect?

    Ian Bremmer is president and founder of the Eurasia Group, as well as global research professor at New York University.

    Welcome.

  • Ian Bremmer:

    Good to be with you.

  • William Brangham:

    The stock market didn’t like these tariffs today, it seems. What’s your take on them?

  • Ian Bremmer:

    Well, there’s no question that a 700-plus point drop is probably the largest we have seen in decades on the back directly of an action of an American president. Right?

    So that’s significant for a president who’s been talking up the markets with regulatory rollback, corporate tax reductions. Business has generally been very happy with Trump.

    What’s interesting, though, is even though the markets are taking a big dump, unlike Trump’s threatened tariffs against American allies all over the world, Canada, South Korea, Mexico, South Korea, Australia, the Europeans, you name it, the corporate community has been increasingly saying to the Trump administration, we think you need to be tougher on China.

    We’re not getting reciprocity. We don’t have market access. They’re stealing our intellectual property. It’s really challenging for us to do business there, and we need someone to be tougher.

  • William Brangham:

    Well, that was the word the president kept using today, reciprocal.

  • Ian Bremmer:

    Yes.

  • William Brangham:

    What they do to us, we’re doing back to them.

    Do you think this is going to have the intended effect, that it will curb China’s actions that all these individuals think are so odious?

  • Ian Bremmer:

    If it was implemented properly and consistently, I think it might.

    I can tell you that senior Chinese officials in the past couple of weeks have told me that in the Boao Forum coming up, which is like their Davos, in April, that Xi Jinping was going to give a really big speech. He’s already now sort of president for life, right, so he’s cleared the decks.

    He was planning on offering a broader reform message in part in response to American pressure. That’s a big deal. But the Americans are fighting this with one hand behind our back, for a couple of reasons, first of all, because, as you know, American allies are not very happy with the United States right now.

    If we were going to start engage in hitting the Chinese hard, our European allies are having the same problems with China, our Japanese allies, same problem. Wouldn’t we want them to be aligned with us?

    Actually, that’s not where they are. Right? We’re hitting them on steel and aluminum and forcing them to come to us and say, can we please have an exemption? We decided not to do Trans-Pacific Partnership. All the Asian allies upset about that, more aligned towards China.

    The Chinese are writing really big checks, one big, One Belt One Road. The Americans can’t even do infrastructure at home, certainly not doing it internationally.

    There’s one other big point, which is this new Taiwan Travel Act just signed into law by President Trump, which says that Americans can travel senior level to Taiwan, will accept Taiwanese leaders to the United States.

    That is a non sequitur to the Chinese and a red flag. They will feel backed in the corner. They consider Taiwan to be domestic policy. And the fact Trump has decided to move ahead an escalation on Taiwan at the same time as he’s escalating on trade says to the Chinese, this isn’t just about trade. This is the Americans and Trump showing his true colors. We’re going to hit you hard.

  • William Brangham:

    So, you think that because we’re not working with our other allies, because we’re doing this other action on Taiwan, because we’re just going in an isolationist way, that it’s not going to do what Trump would like it to do?

  • Ian Bremmer:

    I think America first, especially vis-a-vis China, is a very workable strategy, if it’s strategic, it leads by example, it’s multilateral.

    Instead, it’s the antithesis of that. It’s unilateralist. It’s really transactional in short-term. It’s not doing what it needs to do to actually tell the Chinese, we’re going to take this seriously.

    Look, we got the Chinese under Trump to take North Korea more seriously.

  • William Brangham:

    By pressuring them.

  • Ian Bremmer:

    They squeezed them. They supported unanimous resolutions at the Security Council. They cut off smuggling. They broke down joint ventures with the North Koreans. They never would have done that under Obama or under Bush. And that was because Trump was pressuring them.

    So it’s not that American pressure doesn’t work against the Chinese. And we do need to execute and show that we’re willing to take some market pain in the United States, so that they will take us seriously. But if you want a strategy like this to work, just like on North Korea, you need your allies, you need envoys and the rest. Trump that has not set himself up for success here.

  • William Brangham:

    China said today, we don’t want a trade war, but they implied, if you’re starting one, we will meet you right there on the battlefield.

    Do you think that’s what’s going to happen?

  • Ian Bremmer:

    Look, there’s no question, when we hit them on solar panels a month ago, they came back and hit us on sorghum, and the cost was roughly the same.

    If they end up being charged $50 billion, they’re going to hit the United States. They have already talked soybeans, about a $15 billion export right now to the Chinese. That’s going to hit red states. Trump and allies are going to take it on the chin there.

    They will also hit American corporations doing business with China.

  • William Brangham:

    Ian Bremmer, thank you very much.

  • Ian Bremmer:

    My pleasure.

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