Trump’s ZTE moves ease tensions, but $50bn tariffs still on

The last couple of weeks have seen President Trump try to get back on the good side of Chinese authorities by saving ZTE, but confirmation of trade tariffs on Chinese goods is another contradictory twist in the on-going saga.

The tariffs were promised back in March, and since then Trump has proved to be the aggressor, as well as the saviour of the almost-doomed ZTE, before having authority to ease sanctions eased stripped away by Senators. The determination to save ZTE has been reiterated over Twitter, with some outsiders possibly assuming this a move to ease tensions with the Chinese government, only for the tariffs to be reconfirmed.

The whole seesaw exchange has been a baffling one to follow, purely because there hasn’t been much consistency to the swerves, swipes or strokes. Perhaps this is the ‘deal maker’ strategy from Trump; lure opponents into a false sense of security, before upping the ante and then presenting a less aggressive, more palatable response. Emotionally stress the opponent with erratic behaviour and manipulate them into accepting a deal due to the fear of it disappearing after a bad night’s sleep in the West Wing.

In terms of the tariffs, the total has dropped from $60 billion to $50 billion, but the Trump administration is maintaining a tough stance of trade equality. The final list of tariffed items will be released by June 15, but in the meantime the US will be working to restrict the amount of investment which can be made by Chinese entities or individuals into ‘industrially significant’ US companies or technologies, as well as removing trade barriers into the Chinese market.

“…the United States will request that China remove all of its many trade barriers, including non-monetary trade barriers, which make it both difficult and unfair to do business there,” the statement reads. “The United States will request that tariffs and taxes between the two countries be reciprocal in nature and value.”

The Trump administration seems to want to play hardball with the Chinese government, but for the moment, it is difficult to judge who is gaining the upper hand. In a globalised economy, the imposition of tariffs leans towards isolation, which will never benefit anyone in the long-run. That said, we have not seen any significant reaction from the Chinese government just yet. There has been a bit of posturing, but nothing meaningful.

The US has shown the world what it can do. With a single signature, US sanctions brought a multi-billion organization to the edge of extinction. It was not only a message to China, but perhaps a hint to the rest of the world as well; you might want to develop Plastic Pavements or Silicon Roundabouts, but we are still the bosses of the technology world. Unfortunately we do not know what the repercussions of Chinese aggression could be.

Perhaps the Chinese government is willing to let the Trump administration flap around, erratically and emotionally throwing threats and compromises across the Pacific for the meantime. Eventually doing an awkward impression of a testosterone-fuelled teenager will grow tiresome, and a sensible, diplomatic solution will presented. Maybe this is when China will start to produce meaningful observations and actions.