Terrified Of Trump Return – U.S. Allies Started Sucking Up To China Again With More Western Leaders Visiting Beijing

 Western nations are absolutely terrified at the increasing prospect of Donald Trump’s return to the White House, especially after Joe Biden ended his re-election bid and Kamala Harris is endorsed as his replacement. If the co-producer of TV series “The Apprentice” wins in November, all hell will break loose again. That’s because Trump regards U.S. allies as burdens rather than assets.

 

Unless Harris could beat Trump, which does not seem to be the case, former president and convicted felon Donald Trump is expected to bring back a strict foreign policy marked by isolationism and protectionism. His unfinished business would include pushing allies to help the U.S. isolate and cripple China. But at the same time, Trump wants US allies to pay their “fair share” in exchange for security guarantees.

 

In addition to payments for security guarantees, Trump administration will also impose tariffs on goods from all countries, including American allies. The good thing about Trump is he is extremely fair when come to money matter. He did not punish only China, but also other Western nations or non-Western friends. Even Taiwan has been warned to get ready to pay for U.S. protection.

Because he does not need to worry about re-election unlike his first term, which was filled with empty rhetoric and little substance, President Trump – if he gets elected – will have 4 years to implement his policy agenda along with a more compliant policy team. That means his pledge to slap a 60% tariff on all imports from China would most likely a reality rather than rhetoric.

 

To other countries, he has proposed a flat 10% tariff on all imports into the United States, including allies and non-allies. While this would result in average estimated additional costs per U.S. household of between US$1,700 and US$2,350 annually, the proposed tariff on China would increase household costs by US$3,900 annually – pushing U.S. consumer costs from US$300 billion to US$522 billion.

 

While China is ready to face Trump’s new round of trade war, the same cannot be said about other U.S. allies such as Europe, Mexico, Canada, Japan, South Korea, Taiwan, India and the United Kingdom, just to name a few. If Beijing decides to retaliate by slapping a similar tariff on American products, it could drive the global economy into a depression.

In 2018, Mr Trump imposed 25% tariffs on steel and 10% on aluminium coming from the EU into the U.S. under the pretext of national security. In retaliation, the EU slapped tariffs on US-made goods such as Harley Davidson motorcycles, jeans and bourbon whiskey. Under Joe Biden, the U.S. and the EU have agreed to “pause” their trade war until the end of March 2025 – after the presidential election.

 

But European Union isn’t taking any chances as Trump’s plan would target more than US$3 trillion in annual imports and risks sending inflation soaring, which will trigger trade hostilities and financial meltdown around the globe. To reduce impact, there is only one option – fly to China and suck up to Beijing. That’s precisely what Italy Prime Minister Giorgio Meloni did over the weekend.

 

Italy became the first and only G7 nation to join President Xi Jinping’s signature BRI (Belt and Road Initiative) in 2019 under then-Prime Minister Giuseppe Conte. The relationship between China and Italy took a hit in 2023 when Meloni criticised BRI and withdrew from the Chinese global infrastructure and transportation plan – sometimes called the New Silk Road.

Now, Meloni hopes her 5-day trip from Friday to Tuesday (July 26 – 30) could repair the damaged relations after she said the decision to join the BRI was a “serious mistake”. Italy is China’s fourth-largest trading partner in the European Union, and China is Italy’s largest trading partner in Asia, with bilateral trade at US$80 billion. Hence, Italy needs China more than China needs Italy.

 

Like it or not, Italy is a trade-oriented country and cannot afford an economic and geopolitical confrontation with China. Beijing understood very well how to play politics, thus it did not publicly blame Italy for pulling out of BRI. Instead, the Chinese government has blamed the U.S. and even the E.U. for pressuring Italy to quit BRI. Of course, Meloni’s sudden U-turn is just a “hedging” strategy.

 

Meloni is navigating a delicate balance, seeking to avoid aligning too closely with either the United States or China. It didn’t help that China-EU trade tensions have been growing over electric vehicles (EVs), with the European Union imposing tariffs of up to 37.6% on Chinese EVs in early July. In retaliation, Beijing launched an anti-dumping investigation into imported pork from the E.U.

Hilariously, after warning NATO of threats from Russia and China about 2 weeks ago, PM Meloni scrambles to Beijing to not only “relaunch” bilateral cooperation, but also praises China as an “important interlocutor” in managing global tensions when she met President Xi Jinping on Monday (July 29). China pretends everything is smooth. The fact that Meloni is in Beijing now speaks volumes about the importance of China.

However, whether Meloni could extract meaningful trade benefits after signing a 3-year action plan remains to be seen. Beijing still remembers how she previously urged Italian athletes to boycott the opening ceremony of the 2008 Beijing Olympics in protest at China’s human rights record. Her trip to China is unlikely to result in much substance.

 

Giorgio Meloni is not the only European leader who sucks up to China. Last month (June), German Economy Minister Robert Habeck paid a visit to China to try to improve economic ties while helping to manage the damage as a result of Europe’s tariffs on China-made electric vehicles. As Europe’s largest economy, Germany’s leading car manufacturers were worried about retaliations.

Chinese automakers have urged Beijing to hike tariffs on imported European gasoline-powered cars in retaliation. However, it appears China is keeping that card as the last resort. Besides, the real enemy isn’t Germany, but some elites of European Union who were seen as the puppet of the U.S., especially the Dutch, Danish and Spanish, whose pork industry is being targeted by the Chinese in an anti-dumping probe.

 

China imported US$6 billion worth of pork in 2023 – more than half of that came from Europe, where Spain is the biggest EU pork supplier to China, followed by the Netherlands, Denmark and France. In Oct 2019, Trump imposed a 25% tariff on a wide range of popular European food, drinks and other products, including wine, olives, cherries, cheeses, and pork sausages.

 

If Trump wins the election in November and slaps new tariffs on EU agricultural products as well as German cars, which he had threatened to do so in 2018 but didn’t go ahead, it would create havoc to the European Union, who has to face both the U.S. and China this round. Habeck’s visit to China came shortly after German Chancellor Olaf Scholz’s visit to the same Middle Kingdom in April – suggesting Germany’s desperation.

It’s worth noting that only 10 of the 27 EU countries supported a non-binding vote over the provisional tariffs on Chinese electric vehicles. While France, Italy, Spain, Belgium, and Poland were in favour, Germany, Sweden, and Austria abstained, and Hungary, Slovakia, Cyprus, and Malta opposed the tariffs, which could trigger a full-blown China-EU trade war.

 

Another U.S. ally who has quietly sent a minister to China is Canada. Foreign Affairs Minister Melanie Joly made a surprise visit to China from July 18 to 20 after years of diplomatic strain following the 2018 detention of two Canadians, a retaliation after Ottawa detained at the request of Washington the “Princess of Huawei” – Meng Wanzhou, also known as Cathy Meng and Sabrina Meng.

 

After 3 years under house arrest in Vancouver since 2018 while fighting extradition to the U.S. over dubious violations of U.S. sanctions on Iran involving Huawei affiliate Skycom, the daughter of Huawei’s billionaire founder was allowed to return to China in September 2021. Subsequently, in December 2022, the US Justice Department dropped all charges against her.

Like Italy, despite Canadian government accusing the Chinese government as Canada’s greatest strategic threat, a charge which Beijing rejects, the closest ally of the U.S. appears to consider Donald Trump a bigger threat than the Chinese. By shamelessly flying more than 9,000 kilometres to China, becoming the first Canadian foreign minister to visit China in 7 years, it is seen as a desperate move.

 

Joly’s trip comes a week after NATO members, including Canada, issued a declaration that called China a “decisive enabler” of Russia’s war against Ukraine. Chinese Foreign Minister Wang Yi diplomatically said both nations should view each other in an objective and rational light, treat each other with mutual respect, and handle differences in the spirit of seeking common ground while shelving differences.

 

After all the damages done by Canada, Joly says her visit was towards strengthening cooperation in fields such as the economy and trade, tourism, drug control, climate change and environmental protection, as revealed by Joly. In truth, her government has been under business community’s pressure to repair relations, especially with the emergence of Trump 2.0.

It makes sense for Canada to “pursue pragmatic diplomacy” with China. After all, the U.S. and Australia have sought to mend fences with Beijing. Crucially, Canadian still remembers how the Trump administration slapped tariffs of 25% on imports of Canadian steel and 10% on aluminium in 2020. A former top Trump trade official suggests we could see history repeat itself.

 

China can sit back and enjoy watching Western leaders knock on its door to get an invitation to visit Beijing after Trump’s warning to all the U.S. allies – “If you don’t pay, enjoy yourselves, but we’re not going to protect you”. But that is just half of the threat. Trump also wants all allies to join forces in confronting China, a move which will certainly damage the allies’ economic relationship with China. - financetwitter