Three months after their friendly Mar-a-Lago summit, the honeymoon between Donald Trump and Xi Jinping may officially be over. Signs of tension have been accumulating for weeks, from Rex Tillerson’s threat of secondary sanctions over North Korea to President Trump’s menacing tweet that China’s efforts to restrain Pyongyang had “not worked out.” This week, with South Korea’s president visiting the White House, President Trump fired several shots across the bow.
First on Thursday came the secondary sanctions, per the Washington Post:
“Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a finding that Bank of Dandong, a Chinese bank that acts as a conduit for illicit North Korean financial activity, is a foreign bank of primary money laundering concern, and FinCEN has proposed to sever the bank from the U.S. financial system,” the Treasury Department said in a notification.
In addition, Treasury’s Office of Foreign Assets Control (OFAC) designated two Chinese individuals and one Chinese company “in response to North Korea’s ongoing WMD development and continued violations of UN Security Council resolutions,” the notification stated.
As the Post reports, the sanctions came after Treasury gave China 30 days to step up pressure on a list of Chinese firms that were illicitly dealing with Pyongyang. Unsatisfied with China’s lackluster response, Trump pulled the trigger on sanctions to call Beijing’s bluff.
A few hours after the sanctions shock, the State Department dropped another bombshell on the Chinese, announcing an upcoming $1.42 billion arms sale to Taiwan. The news quickly sent Beijing into a tizzy, with the Chinese Foreign Ministry demanding that the U.S. revoke its decision and claiming that the move “[ran] counter to the consensus reached by the two presidents” at Mar-a-Lago.
Still reeling from those two developments, the Chinese woke up on Friday to a the following scoop from Axios: Trump is preparing to launch a major trade war with China, overruling nearly his entire cabinet to impose massive, punitive tariffs on steel and other goods:
With more than 20 top officials present, including Trump and Vice President Pence, the president and a small band of America First advisers made it clear they’re hell-bent on imposing tariffs — potentially in the 20% range — on steel, and likely other imports.
The penalties could eventually extend to other imports.Among those that may be considered: aluminum, semiconductors, paper, and appliances like washing machines.
One official estimated the sentiment in the room as 22 against and 3 in favor — but since one of the three is named Donald Trump, it was case closed.
Time will tell if a trade war will actually happen. But in any case, the Chinese have a lot to think about; have they underestimated Trump’s willingness to escalate—and overestimated their own ability to control him with false promises and symbolic concessions?
Buckle up, folks. This could be a bumpy ride.