China Called Trump’s Bluff

By Jonathan Chait

Monday, May 12, 2025

 

When President Donald Trump launched his trade war on the world, he issued a stern warning: “Do not retaliate and you will be rewarded.” China ignored the warning. It was rewarded anyway. This morning, Trump largely suspended his trade war in return for nothing but promises of ongoing discussions. There is a lesson here for everybody Trump threatens, whether countries or businesses or universities.

 

The unveiling of the Trump global tariff regime was accompanied by a distinct form of dominance theater. The president and his gang assured his targets that if they submitted to his tariffs, he would repay their compliance. Any country that dared defy him would suffer terribly.

 

“I wouldn’t want to be the last country that tries to negotiate a trade deal with @realDonaldTrump,” posted Eric Trump. “The first to negotiate will win—the last will absolutely lose. I have seen this movie my entire life.”

 

Most of the world accepted this advice, only to discover the difficulty of making global trade deals with a president who doesn’t seem to understand how trade works. Foreign diplomats expressed repeated frustration as they failed to ascertain what Trump even wanted from them, let alone what he was prepared to offer in return. To date, only the United Kingdom has managed to resolve its trade status with the United States.

 

China, however, retaliated with countermeasures of its own, imposing steep tariffs on American imports. Trump decided to make an example of the country. “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” he announced on Truth Social. (This figure eventually increased to 145 percent.) Other countries, which had showed proper respect, would receive a merciful reprieve. “The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction,” claimed Commerce Secretary Howard Lutnick.

 

Trump held out for one month before backing down. Under the new 90-day agreement, tariffs on Chinese goods will come down to 30 percent; China’s tariffs on American goods will likewise decline to 10 percent. “The consensus from both delegations is that neither side wanted a decoupling,” Treasury Secretary Scott Bessent announced at a press conference in Geneva, as if the whole thing had been one big misunderstanding. The decades of China allegedly “ripping off” the United States were apparently forgotten, along with China’s insolence in retaliating and the supposed need for the U.S. to reduce its reliance on Chinese imports. The administration isn’t even pretending that it forced China to pay any special price for its defiance. It is memory-holing the entire “do not retaliate” episode and moving on as if the point this whole time was to get along better with Beijing.

 

As an exercise in trade policy, this makes no sense. But to treat Trump’s behavior as if it were narrowly tailored to the objective of reordering global trade misses the symbolic role it plays. Trump is performing a character, the presidential version of the boss he played in The Apprentice, sitting in a plush leather chair doling out justice to quavering supplicants.

 

His threats of conquest against Canada, Greenland, and Panama, and his unilateral renaming of the Gulf of Mexico, advance no practical objective. Indeed, they generate resentment that weakens his leverage over those countries. Trump’s best chance to add Greenland to the United States, for example, would have been to use a soft touch, rather than to insist that he would have it one way or another. The purpose that these gambits seem to serve is to establish Trump as the boss man lording his power over vulnerable targets.

 

The original target of this ritual was Mexico. Trump’s crowds used to delight when he would respond to any defiance by announcing, “The wall just got 10 feet higher.” Nobody believed that Trump was planning to literally increase the height of the wall. The point was to show that Trump was in charge, and that anybody who tried to stand up to him would be punished.

 

This makes for an unusual style of governing, to say the least, and even a decade into the Trump era, the president’s targets often respond with confusion. But the evidence suggests a fairly clear pattern: Although Trump instructs his targets to submit, doing so merely sets them up for more humiliation and abuse.

 

Consider a handful of recent cases. Columbia University agreed to the Trump administration’s invasive demands, only for the administration to come back and issue even more. The powerful pharmaceutical lobby decided not to resist Trump’s nomination of Robert F. Kennedy Jr., whose weird ideology poses an existential threat. Not only has Kennedy declined to back down from his extreme positions; the administration has escalated its war on the industry by cutting funding for scientific research and taking steps to impose limited price controls.

 

By contrast, when Harvard defied Trump’s list of demands, the administration claimed that its letter threatening the university had been released in error, and complained that the famous university had acted unreasonably. True, Trump has escalated by targeting Harvard’s tax-exempt status, but he stands little chance of winning in court, and defying court orders won’t help him make Harvard pay taxes that it does not legally owe. Similarly, after Canadians elected Mark Carney as prime minister and he insisted that his country could never be purchased or taken, Trump responded with a friendly Oval Office meeting in which he seemed to accept Carney’s refusal.

 

The genuinely complicated factor in these negotiations is that “winning” with Trump is often impossible, because the relationship itself is lose-lose. Trump does not appear to recognize the possibility of a positive-sum engagement, and his attempts to turn a productive connection into an exploitative one create losses for both sides. This is most obvious in trade, where Trump’s protectionist instincts have spread pain around the globe without generating any gains. His extortion of domestic firms and civil society has likewise undermined some of America’s most admired sources of innovation, for no offsetting benefit other than the expansion of Trump’s own power.

 

Trump is a classic bully who craves submission and fears conflict. His fervent supporters want him to be Michael Corleone, but he’s more like Biff Tannen. Standing up to Trump does not mean that you win. But giving in guarantees that you lose.