Schrodinger's president: Trump's tariffs exist and don't - except on China
US President Donald Trump's keystone tariff policy increasingly resembles Schrodinger's cat: it may or may not exist, depending on the day.
First, there were tariffs at eye-watering rates of 40 or 50 percent or even higher. Then they were mostly cut back to 10 percent, but only for 90 days. Next came talk of individual deals with favoured nations, but none have actually been announced.
No surprise, then, that in the most recent edition of the Federal Reserve's Beige Book - a compilation of business reports from across the US - the word "uncertainty" appeared 80 times. In January last year, it was used just 14 times.
That uncertainty is now hitting consumers directly.
As of Friday, the Trump administration implemented a new tariff policy eliminating the "de minimis" exemption for low-value imports from China. Previously duty-free goods are now subject to tariffs of up to 145 percent, triggering immediate price hikes on online products. Retailers and consumers alike are grappling with the sudden cost increases - a clear example of the trade policy's unpredictability.
The uncertainty principle seems likely to continue operating for some time. It is a paradox that defines the administration's trade stance: volatile in form, yet brutally consistent in effect.
Trump recently told Time magazine: "The deal is the deal I choose. What I'm doing is I will, at a certain point in the not-too-distant future, I will set a fair price for tariffs for different countries."
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But if uncertainty - not to mention, confusion - reigns in the US' relations with much of the world, there is one country where its policy is absolutely clear: China.
China exception
There is no doubt that a full-scale trade war is already well underway. Trump has imposed tariffs of 245 percent on China and China has retaliated with tariffs of 125 percent on the US.
Sea-container traffic between China and the US has already slumped by 60 percent. In early May, the number of container ships departing Chinese ports for the US West Coast fell by a further 29 percent.
Regardless of other tariff measures, an all-out trade war between the world's two largest economies poses a major threat to global economic stability
Regardless of other tariff measures, an all-out trade war between the world's two largest economies poses a major threat to global economic stability. As trade slumps, price rises and lay-offs - among truckers and retail workers, for instance - are likely to follow.
The problem for Trump is that the path he wants to pursue - a relatively autarkic redevelopment of the US industrial base - has, in fact, been Chinese policy for decades.
China is already, at least in part, where Trump would like the US to be.
It has high-tech, integrated industrial supply chains that the US has failed to nurture adequately. BYD is ahead of Tesla in electric vehicle production. Apple is both dependent on Chinese manufacturing and increasingly challenged by Chinese alternatives.
Indeed, a trade war with the US may push China further along a path it already intends to follow.
As many industrialising countries have discovered, China must grow its internal consumer market if it hopes to sustain its now-declining growth into the next phase of development.
The Chinese Communist Party is already attempting to do this, but a trade war with the US may spur even more decisive action.
Economic divergence
China took its cue from Trump's first presidency, beginning a shift away from its dependence on US trade that has only deepened since.
For instance, American farmers once supplied 40 percent of China's soybean imports. That figure has now been cut in half. China has ramped up soy cultivation at home and bought record volumes of the crop from Brazil, which is now its largest soybean supplier.
The US is no longer China's largest export market. That position now belongs to Southeast Asia. In 2023, China was the biggest trading partner for 60 countries - nearly twice as many as the US. The world's largest exporter today is China, not the US.
It is precisely these considerations that are driving the trade war beyond merely economic limits. The trade war has already become a diplomatic one.
Some of this is bizarre, such as the ban on US personnel in China having "romantic" relationships with Chinese nationals.
But other consequences are more serious: China has already warned that it will retaliate against countries making deals with the US that harm Chinese interests.
On the carrot side, the Chinese president has been quick to tour Southeast Asian trading partners to capitalise on Trump's tariffs on those economies. He is even making overtures to the European Union, casting China as a stable and reliable partner in contrast to Trump's bazooka diplomacy.
Georgios Papakonstantinou, a former Greek finance minister, has said Europe now has no option but to move closer to China in order to withstand what he calls the "Trump 2.0 assault on the global order".
A former European commissioner for trade, Cecilia Malmstrom, sees an opportunity to revive the frozen Comprehensive Agreement on Investment, contingent on China lifting sanctions on European individuals.
Although Europe needs Chinese green technology, it remains wary of unfair trade practices.
In fact, those bans on EU lawmakers, imposed after the EU sanctioned certain Chinese officials in 2021, are already set to be lifted by China.
"Since Trump's return, the Chinese have been on a charm offensive to convince global actors that they should look to China for a reliable partner," said Varg Folkman, an analyst at the European Policy Centre. "The main goal of the Chinese in lifting sanctions is likely to pave the way for trade discussions with the EU," he added.
European fallout
There is still a long way to go before EU-China detente could become a reality, but the rapid shift in approach shows just how far-reaching the consequences of this new tariff-driven global order may be. It underscores that the fallout will be political as well as economic.
Nothing illustrates this more clearly than the secret guidance issued by Defence Secretary Pete Hegseth. Leaked ahead of his visit to the Pacific island of Guam, the document's headline warned of imminent Chinese threats to Taiwan.
But just as significantly, it also spelt out implications for other US theatres of operation, drawing heavily - sometimes word-for-word - from material produced by the right-wing think tank the Heritage Foundation.
The Washington Post summarised the secret document in these terms: "The Pentagon will 'assume risk in other theaters' given personnel and resource constraints, and pressure allies in Europe, the Middle East and East Asia to spend more on defence to take on the bulk of the deterrence role against threats from Russia, North Korea and Iran, according to the guidance."
Hegseth wrote that the Pentagon would consider conflict only with Beijing when planning contingencies for a major power war, leaving the threat from Moscow largely to European allies.
This stance, of course, is what is fuelling the manic drive towards rearmament among governing elites across the European continent. It leaves UK Prime Minister Keir Starmer - by far the most Atlanticist of all European leaders - in a position of extreme isolation, still hankering after an alliance for which the Trump administration now has little use.
Military action
The US is now preparing for war with China.
It is the most unstable international situation since the 1930s, and it demands a response from radical anti-war voices willing to pull societies back from the brink
As The Post reports: "The new Pentagon guidance for a 'denial defence' of Taiwan includes increasing the troop presence through submarines, bombers, unmanned ships, and speciality units from the Army and Marine Corps, as well as a greater focus on bombs that destroy reinforced and subterranean targets. The plan also calls for improving the defence of US troop locations in the Indo-Pacific, generating pre-positioned stocks and improving logistics."
These preparations reflect more than a tactical shift. They signal a return to Cold War-style doctrine, where instability is engineered, not avoided, and confrontation with China is the organising principle.
This is the world Trump is making: economically destabilising trade wars, disengagement from Europe and the Middle East that leaves warmongering proxies to defend the Hadrian's Wall of US power, and aggressive military preparations for conflict with China.
It is the most unstable international situation since the 1930s, and it demands a response from radical anti-war voices willing to pull societies back from the brink.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.
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