The Chinese government turned the table on President Trump on Friday and responded to his trade threats with tariffs of its own against U.S. companies, marking the latest example of the U.S. leader trying to exert leverage but finding himself confronted with rejection and retaliation.
The escalating problems with China demonstrate how one of Trump’s most favored tactics in business — trying to create leverage by cornering an opponent — has not been particularly effective in the White House.
Trump has tried this approach with foreign policy, immigration, budgeting and private companies — and frequently on trade. White House officials had hoped that threatening to impose tariffs on China would force Beijing to offer concessions, but talks fizzled out quickly and both countries moved forward with punitive measures that analysts think could harm two of the world’s leading economies.
This approach, imposing a threat and pushing the other party to fold on deadline, comes straight from Trump’s book on negotiating, “The Art of the Deal.”
“The best thing you can do is deal from strength, and leverage is the biggest strength you can have,” the book says. “Leverage is having something the other guy wants. Or better yet, needs. Or best of all, simply can’t do without.”
So far, Trump’s negotiating partners have largely done without.
China’s refusal to bend follows several other countries and companies doing much the same: brushing off Trump’s threats and challenging him to go further. Canada and Mexico have frequently dismissed Trump’s demands for specific provisions he wants changed in the North American Free Trade Agreement, even though he has said he would withdraw from the pact if they do not bend soon.
The European Union has refused to eliminate all tariffs on U.S. goods, even though Trump refused to exempt it from tariffs on steel and aluminum imports.
Domestically, Trump has also threatened to shut down the government in October if Democrats refuse to give him billions of dollars to build a wall along the Mexican border, a demand they have so far refused to accept. He has balked on several earlier threats to shut down the government, emboldening Democrats to question his willingness to follow through.
And Harley-Davidson did not back down from its announcement last week to move some operations overseas, even though Trump threatened to hit the firm with severe taxes and lead a public-relations campaign that could put it out of business.
Meanwhile, Congress has repeatedly rebuffed Trump’s demands for $25 billion in funding for a border wall, despite his demands that the money was needed as part of any budget deal, immigration discussion or to allow immigrant children to reunify with their parents.
“His playbook so far doesn’t appear to have the word ‘compromise’ in it,” said Timothy Naftali, an associate professor of public service and history at New York University. “And he hasn’t given reasons to people who don’t already agree with him to work with him.”
These threats — and the reaction to them — will be further put to the test next week, when Trump travels to Europe to meet with global leaders. He has threatened to withdraw from NATO and the World Trade Organization, two global bodies that underpin existing security and economic alliances Trump has said are flawed.
He wants major changes made to both, but his counterparts have been hesitant to meet many of his demands so far. And a number of European leaders have recently expressed a willingness to sideline Trump and the U.S. government from multinational discussions rather than heed U.S. directives.
“We won’t talk at all with a country if it is with a gun to our heads,” French President Emmanuel Macron said in March.
White House officials and key Trump supporters said the president isn’t bluffing. His break-the-glass approach is based on his view that many of these multi-decade arrangements have harmed the United States, its workers and its companies. If this leads to complaints, they say, too bad, particularly when it comes to the United States’ economic relationship with China.
“Trump is doing what needs to be done,” said Dan DiMicco, who was an adviser to Trump during the 2016 campaign. “The rest of the world needs to stop this baloney from China. . . . Our allies have to feel the pain because they have to be willing to work in a strong fashion against China.”
On Friday morning, the United States began imposing a 25 percent tariff on $34 billion in Chinese imports, including plastics and material used for manufacturing. Beijing retaliated immediately by imposing tariffs on U.S. soybeans, corn, beef, wheat and a variety of other products that could have a major impact in farm states.
White House officials and Chinese leaders had discussed ways to avoid imposing tariffs, but those talks faltered, and a senior Chinese official this week said that Trump’s approach was tantamount to “blackmail.”
Other threats from Trump began almost immediately after he took office.
When Trump became president, these threats sparked concern around the world, leading foreign leaders to try to discern how to mollify the new leader. Canada and Mexico agreed to renegotiate NAFTA under the threat of withdrawal from Trump, but they have recently joined forces in resisting his demands; the process has stalled. Last year, when White House threats to withdraw hit a fever pitch, his top advisers made clear that they felt he was in the strongest position to demand changes.
“The president has put himself in a perfect position on NAFTA because folks know he’s inclined [to be] negative on NAFTA, yet he’s open to negotiating,” then-Chief of Staff Reince Priebus told The Washington Post at the time. “It’s a good spot to be. The leverage is all with the president.”
Using the same approach, Trump has threatened to leave NATO, the WTO and a trade deal with South Korea.
These threats have, at times, had success, particularly with smaller countries that can ill afford a skirmish with the United States. South Korea agreed to a quota on its steel exports to the United States as a way to avoid facing the tariffs Trump imposed on many other countries.
Similarly, North Korean officials have had numerous meetings with the White House after Trump signaled his openness to engage in a nuclear standoff with Pyongyang.
And Trump has said his threats to cancel orders of F-35 planes led to price reductions from Lockheed Martin, though some analysts have said the truth is more complicated.
Sometimes Trump backs down from these threats, and sometimes he doesn’t.
After threatening to act, Trump has taken steps to withdraw from a climate agreement with dozens of other countries, pulled the United States out of a nuclear agreement with Iran and other nations, and imposed tariffs on China, Mexico, Canada, Japan and members of the E.U.
But in other cases, he has relented.
Last month, he threatened to continue separating immigrant children from their parents if Congress did not pass a law that included funding for a new wall. Congress did not act, but Trump signed an executive order to end the practice of separating families after immense public blowback.
White House officials had also hoped leaders in Beijing would agree to voluntary changes. And he also took steps to impose large restrictions on Chinese investments in U.S. companies, but he backed down.
Trump’s supporters said his actions, particularly on trade, amount to much more than threats. He is trying to reorder what he considers to be major imbalances in the way the United States is treated in the world, and the only way to do this is by breaking norms that have constrained the country for decades, particularly related to China, Trump has said.
This approach has forced some of Trump’s senior advisers to change their own approach. National Economic Council Director Larry Kudlow was a fierce opponent of Trump’s tariff tactics before he joined the administration, but the president made clear that he had softened his longtime friend’s thinking when he was discussing whether to bring Kudlow on board.
Kudlow “now has come around to believing in tariffs also as a negotiating point,” Trump said in March.
Trump has leveled another global threat in recent weeks, dividing Republicans on Capitol Hill and even some White House officials who do not know whether he will follow through. He has signaled that he will impose tariffs on all imported autos, a change that could have major consequences for U.S. consumers and further complicate the White House’s relationship with major trade allies such as Germany and Japan.
Trump wants Europe to eliminate or at least lower the tariff it imposes on U.S. cars shipped there or he said he will make the United States’ levy even higher than the 10 percent it imposes.
German Chancellor Angela Merkel said Thursday that she would support lowering tariffs on U.S. imports, according to Reuters, a sign that Trump’s ultimatum might be working. She said it’s more complicated than Trump’s directive, though, because European officials would have to lower tariffs on auto imports from all countries to comply with global trade rules.
But if European officials eventually decide to rebuff Trump again, he will be forced to decide whether to follow through on his own.
One senior White House official doubted Trump would ultimately impose the auto tariffs, but he said only the president knew for sure what action he would take.
“I just can’t imagine they’ll come to enact them,” the official, who spoke on the condition of anonymity, said. “I don’t think they’re going to happen, though I can’t be sure.”
Heather Long and Jeff Stein contributed to this report.