Trump’s War Against China Begins

Trump launched a two-year trade war against China during his first term in the White House, and he’s poised to do it again.

Even before being sworn in, Trump threatened China with 60 percent tariffs to cut its trade surplus, 10% tariffs if it didn’t halt fentanyl shipments and 100 percent tariffs if it tried to create a rival currency to the dollar. 

On his second day in office, he announced the first wave of tariffs would hit China on Feb. 1.

During the first trade war, Chinese President Xi Jinping got the full Trump treatment. Shortly after being inaugurated, Trump hosted Xi at his Mar-a-Lago estate where they talked for hours over meals. 

As the two ate chocolate cake, Trump launched 59 missiles at targets in Syria in retaliation for a gas attack there, a reminder to Xi of American power.

Trump, as he likes to remind us, is a “tariff man.” It’s essential to his political identity and has been for decades. During his first administration, Trump’s main demand of China was to buy more American goods and reduce its then $375 billion trade surplus with the U.S.

Chinese negotiators regularly offered to buy more U.S. goods as Trump wanted. But China had grand technology plans, which it refused to change no matter the tariff hit. 

A 2015 Chinese report, called “Made in China 2025,” laid out Beijing’s strategy to become a leader in 10 important tech sectors. For that, China needed a trade deal that would assure continued access to U.S. technology.

Fast forward to 2025, and the stock market remains pivotal to Trump; what’s changed, though, is the market is now much easier for China to influence. The top seven companies in the S&P 500 now account for 28 percent of the index’s weight, about twice as much as in 2017.

A number of those firms, including Apple, Tesla and Nvidia, are deeply dependent on China for profits.