Trump wants to retaliate against China over its handling of the coronavirus outbreak. Exactly how is anyone’s guess.
As President Donald Trump weighs ideas for punishing China over its handling of the coronavirus outbreak, some inside and outside the White House want him to respond forcefully.
“In my personal opinion, we should drop the fucking hammer on them. Stop being such pussies,” a senior White House official told me, speaking on condition of anonymity because they weren’t authorized to disclose internal deliberations.
Top Trump allies, including Secretary of State Mike Pompeo and Republican senators, are pushing Trump to castigate China. Sen. Lindsey Graham, for example, has said the US should “make China pay big time.”
The Washington Post reported Thursday that US officials from multiple agencies were planning to gather that day to discuss crafting some sort of retaliation against China.
“President Trump has fumed to aides and others in recent days about China, blaming the country for withholding information about the virus,” the Post reported.
The Chinese government delayed releasing information about the outbreak of Covid-19 in the city of Wuhan, costing world governments precious time to prepare. It’s ruthlessly exploiting the pandemic to further its own foreign policy goals. And on Friday, Sky News reported that the Chinese government is refusing to allow investigators with the World Health Organization to participate in China’s inquiries into the virus’s origin.
These actions — as well as Trump’s likely desire to deflect some of the blame from his own administration’s poor response to the coronavirus crisis in the US — are why the Trump administration is looking to formally rebuke China in some way.
Here’s what’s in the works.
From stripping sovereign immunity to canceling debt
The ideas reportedly under consideration include stripping China of its “sovereign immunity” status under US law — which would allow the US government or private citizens to sue the country — and cancelling some or all of the interest payments on the more than $1 trillion in debt the US owes to China (the senior White House official I spoke to said they favor the latter option).
“Punishing China is definitely where the president’s head is at right now,” one senior adviser told the Washington Post on Thursday.
Yet Trump, in public at least, has sounded far more cautious about using these measures. “You start playing those games and that’s tough,” Trump said at a press conference on Thursday when asked about the idea of canceling interest payments to China, adding that doing so could undermine the “sanctity of the [US] dollar.”
This echoes comments made the same day by Trump’s top economic adviser Larry Kudlow, who called reports the administration was considering canceling debt payments “absolutely and unequivocally untrue,” adding that “the full faith and credit of US debt obligations is sacrosanct.”
This is why the senior White House official I spoke to said they’re “very doubtful senior advisers will allow” the debt-payment idea to go forward, acknowledging that Congress would likely try to block such a move anyway.
But some Trump advisers and allies are still pushing the president to retaliate against China in some way.
At the same Thursday press conference, Trump suggested another idea: imposing billions of dollars in additional tariffs on China.
Why tariffs wouldn’t punish China
To punish China, the US “can do it with tariffs,” Trump said Thursday.
Yet there’s (at least) one big, glaring problem with this idea: Though Trump has long believed that China pays these tariffs and the money goes to the US Treasury, that is not at all how tariffs actually work.
Tariffs raise the price of buying Chinese goods for American consumers. The idea is that by making Chinese products more expensive, American consumers will stop buying them from China and buy them more cheaply from somewhere else instead. While that would ultimately harm Chinese producers in the long run, in the short run, it’s American consumers who are stuck paying these tariffs, not China.
With US unemployment claims having reached a staggering 30 million and the country facing an economic downturn unseen since the Great Depression, making things more expensive for American consumers would be less a punishment on China and more a self-own.
On top of that, the US has already placed tariffs on nearly every major Chinese product, so it’s not even clear that the eventual impact on Chinese manufacturers would be all that meaningful.
Still, it seems some kind of retaliation is coming. Asked Friday about the administration’s China considerations, White House press secretary Kayleigh McEnany said she wouldn’t get ahead of the president on any announcements, but she reiterated Trump’s “displeasure with China,” adding, “It’s no secret that China mishandled this situation.”
“The China approach is all over the place”
Some sort of grander planning has already begun.
Multiple sources at the State Department told me that Pompeo has almost every office doing some sort of work involving China. Whether in Asia, the Middle East, Latin America, or elsewhere, Pompeo has staff looking at ways to counter China’s aims, such as having US allies end certain business contracts with Beijing.
However, some in the State Department believe there’s no real strategy to the top-down directive. The entire idea is “shortsighted,” said one staffer tasked with finding ways to push back on China, who spoke on condition of anonymity because they were not authorized to talk to the press. “The China approach is all over the place.”
Another State Department staffer pushed back against the notion that the department is in search of a more-robust-than-normal stance against China. “It is our standard policy to counter Chinese influence,” they told me.
What’s clear, though, is that the administration is thinking of ways to up the ante against China. When, and what, Trump decides to do is what everyone’s waiting on.
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Author: Alex Ward