“I don’t think any of the numbers mean anything”: How Washington is bracing for Trump’s next trade war

The Republican presidential frontrunner is reportedly considering up to a 60 percent tariff on all imports from China and a 10 percent “universal” tariff on all other trading partners if he wins reelection in November. But Trump, in his usual style, has refused to commit to any specific numbers,
saying on Fox Business this Sunday that tariffs on China could even be higher than recent reports.

In a sign that even some of his own advisers don’t know what’s in Trump’s head, one former Trump trade official said the reported tariff plans have “always been a negotiating tactic.”

“I don’t think any of the numbers mean anything,” said the former official, granted anonymity to discuss Trump administration dynamics. “The 10 percent or the 60 percent — that’s all just the starting point of the discussion.”

The fresh tariff threats open a new era of Trumpian uncertainty for American companies and trading partners as the former president closes in on the GOP presidential nomination. The real estate magnate loved to keep foreign governments guessing about his trade policies during his first term, often contradicting his economic officials or abruptly changing policy direction through social media posts.

“Part of this is just to get attention, and you don’t want to give him that attention,” said one Washington trade lobbyist, granted anonymity to discuss conversations with clients. That insider and others emphasized that businesses are taking the general threat of tariffs seriously, even if the ultimate amount is still unclear, saying there’s “no doubt” that he’ll try to increase tariffs to some extent.

For now, it’s a wait-and-see approach for most U.S. trading partners.

In Canada, Prime Minister Justin Trudeau announced the creation of a special “Team Canada” task force to prepare for the American election, dispatching Minister of Export Promotion, International Trade and Economic Development Mary Ng to Washington last week for meetings on the cross-border trade relationship. But despite being part of a Trudeau administration that admonished Trump’s tariffs during his first term, Ng refused to weigh in on Trump’s tariff proposals during a sit-down with POLITICO last week, saying it’s “important to let the American electoral process happen.”

Businesses in allied nations are trying to look on the bright side, even in the face of new tariffs. In Japan, some industry officials are expressing mixed feelings about a potential Trump return, said one Japanese government official with knowledge of industry sentiment.

“On one hand, they think Trump might be a business-friendly president compared with Biden in terms of energy, climate and labor standards,” said the official, granted anonymity to discuss internal conversations with industry. “However, they also think that Trump will be less interested in cooperating with allies including Japan and may implement a number of America-centric unilateral measures, including a 10 percent tariff.”

Diplomats in Washington are uncertain if Trump’s comments on Sunday were merely trademark bluster or a statement of post-electoral victory policy intent. The latter possibility is unnerving for its potential to fuel negative ripple effects across the global economy.

Trump “talks about the tariff war as a crowning achievement of his last term, so as a declaration of intention to escalate tariffs that’s certainly believable, but it’s hard to imagine how that wouldn’t boomerang on the U.S. given the amount of trade between the two sides,” said a Washington-based diplomat granted anonymity because they were not authorized to speak on the record.

Others see Trump’s comments as a classic bargaining gambit. The possibility that Trump may try to leverage the threat of massive tariffs to cut a deal with China worries a second Washington-based foreign diplomat granted anonymity because they were unauthorized to speak on the record. Trump’s obsession with public display of his negotiating skills could result in an agreement that Trump would tout as a victory but which could deliver potentially disproportionate gains for Beijing, the diplomat said.

Even if tariffs risk economic blowback for the U.S., Trump’s threat against China could be treated more urgently by Beijing as it struggles with sputtering economic growth.

If Trump “really wanted to bring down Xi Jinping and the Chinese economy, this would certainly help,” said Harry Broadman, a former Assistant U.S. Trade Representative, who calls Trump’s comments “a credible threat” to Beijing.

Chinese state media has avoided reporting on Trump’s comments and Beijing’s official reaction to the former president’s televised remarks stressed support for bilateral economic cooperation without mentioning Trump. That reflects both Beijing’s current emphasis on positive messaging about the U.S.-China relationship as well as a desire to avoid feeding a likely China threat narrative in the U.S. presidential election campaign.

“Upholding sound and steady growth of China-U.S. economic and trade ties serves the fundamental interests of both countries and our peoples and is conducive to global economic growth,” Chinese embassy spokesperson Liu Pengyu said in a statement on Tuesday.

The aversion to publicly commenting on Trump’s plans reflects an inconvenient reality for foreign capitals and international businesses alike: While the exact number is in flux, higher tariffs at some level are still likely under a second Trump administration.

“Tariffs are extremely popular, really good politics,” said the Washington lobbyist, “even when all objective evidence shows that they’re bad for the people who support them.”