Tuesday, 02 January 2024 12:17 GMT

This Former US Trade Representative To China Feels That Donald Trump's New 100% Tariffs Will Fail. Again. Here's Why


(MENAFN- Live Mint) Jeff Moon, a former Assistant United States Trade Representative to China during the Barrack Obama administration, feels that US President Donald Trump's new tariffs against China will be“limited and ineffective”.

Speaking to Bloomberg TV on October 11, Moon added that he thinks Donald Trump should have learnt from having to roll back tariffs in April, that the US cannot sustain excessive duties against China in the long term.

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Speaking on the channel's 'The Close', Moon felt that Trump's move is one that has been shown to fail. When asked why he thinks increased tariffs against China would be ineffective, Moon recalled how Trump rolled back 145 per cent tariffs imposed in April, which led to the“TACO” trade remarks - i.e. the“Trump Always Chickens Out” memes.

“The Chinese did not back down (in April), did not flinch at all. And after that, Trump backed off, Trump blinked. And I think he should have learnt from that experience that tariffs at that massive rate are just not sustainable on the US side and there are a lot of constituents that would object strenuously,” Moon stated.

He added that for the Chinese side, while the“people would be hurt”, the government would“play the nationalism card”, adding,“Frankly, the Chinese people would eat the pain, and so this would not work out very well for Trump.”

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Moon felt that Trump's new tariffs have impacted trade talks between US and China“to a certain extent”. He was of the opinion that China's curbs on rare earth mineral exports was“planned” and“intentional”, and came in response to continued US tariffs on various goods, despite talks progressing.

“In the past few months, it's amazing how the rhetoric has changed. (US Treasury Secretary Scott) Bessent has talked about the respectful interchange with his Chinese colleague, and how respectful, they all are. So the tone had been modified, it was very business-like,” Moon said.

He added that on the Chinese side, they likely perceived that, the US kept on imposing restrictions and“really bristled at that”. He noted that that Chinese export restrictions were announced after a long national holiday, which meant that“these restrictions were planned and approved before the holiday. This is not an accidental event, this was something that was very intentional.”

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Moon felt that while US tactics in dealing with China have not changed over the years, it is now more aggressive. Giving insight on how he sees the Chinese dealing with such issues, he stated,“The Chinese have always retaliated. When the Chinese feel that they've been aggrieved they will retaliate 100% plus 10% extra.”

He added that they look for leverage in various forms.“One way they do that is to try to divide and conquer. That is to find interests in the US that will oppose the government. For example, the semiconductor industry in this case. And also to try to do the same thing internationally to try to find, you know, other countries that will object,” he added.

He also believes that another consistent Chinese theme is self-sufficiency.“The Chinese contrary to the Trump administration's belief - since the founding of the People's Republic - have always talked about, developing their own technology, and never being dependant on foreigners. And so, there are a lot of these themes is just, we're getting them in different flavours, I think in this context and more aggressively,” he added.

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When asked if talks between the US and China could recover and if there is anything the US has to offer to bring China back to the negotiating table, Moon was optimistic.

“The Chinese want several things from the US. They want tariff to be lowered specifically, the 20 per cent tariffs, that Trump impose supposedly due to fentanyl. They do - despite what they say - want US chips. They've just imposed a variety of restrictions, but they want those chips. And those restrictions could be lifted instantly,” he noted.

He also pointed to Chinese need for aeroplane parts, student visas, and invest in the US.“So there are a lot of issues that have been under discussion and there are things that the Chinese want from the US. Although, they have systematically been sort of re-routing, both their needs and both their exports to avoid restrictions in the US,” he added.

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Notably, in an interview with Fox News, US Trade Ambassador Jamieson Greer said that the US is“ready” for a trade war with China, if needed.

“Well, we'll see. It does not have to be. But we're ready to do that, if necessary. We think the American people are up to it,” he said.

Greer said that the US wants to have a balanced relationship with China,“but it needs to change aspects of its economy where it produces too much, (has) unfair trading practises, and it tries to force everyone into doing what it wants.”

“I think we can have a better relationship. The president (Donald Trump) and president Xi (Jinping ) have a great relationship. We actually have good conversations with our counterparts. But we are in the middle of finding out where each other's lines are. And we, we need to take this time over the next few days to see if there's a way forward. But if not, we're going to take strong action just like the president signalled,” he added.

On whether this means a lock on the TikTok deal, Greer did not have answers.“That is a separate issue, I believe. That is not been part of the discussions.”

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