Donald Trump and China's President Xi Jinping shake hands ahead of their bilateral meeting during the G20 leaders summit in Osaka, Japan, June 29, 2019. REUTERS/Kevin Lamarque/File Photo
President Donald Trump has repeatedly promised to make America more competitive compared to China, yet a recent report suggests the opposite has proved to be the case.
“While Washington raises walls, Beijing is opening doors,” wrote Fortune’s Steve H. Hanke on Sunday. “On May 1, Chinese tariffs on imports from all 53 African countries with which China holds diplomatic relations plunged to zero. Europeans now enter China visa-free. India’s Modi government is fast-tracking minority Chinese investment in seven strategic sectors. China’s DeepSeek AI went open source, giving the world’s developers free access to a frontier Chinese AI model. While Washington is tightening export controls on America’s AI enterprise, China is open for business.”
Hanke explained that, as the price of oil has risen due to Trump policies like the war against Iran, China has provided relief to many suffering countries. He also noted that, unlike America under Trump, China’s government has worked hard to improve its public image in other nations.
“And then there is Beijing’s ace: rare earths,” Hanke added. “Beijing’s control of neodymium, praseodymium, samarium, europium, gadolinium, and yttrium oxides is virtually total. Every advanced weapons system, every electric drivetrain, every wind turbine, every smartphone in the United States runs through China’s critical materials. To replenish its weapons stockpiles that have been depleted due to America’s proxy war against Russia and its open warfare against Iran, the U.S. Department of Defense now needs Beijing’s permission to restock. The rules of the road are being rewritten, and they are being rewritten in Beijing.”
He added, “The verdict is in. The Alliance of Democracies’ Democracy Perception Index, which was released on May 8, puts China’s net global perception at +7 [percent]. Meanwhile, the international perception of the U.S. has collapsed. Two years ago, it sat comfortably at +22 [percent]. Today, it has plunged to a dismal -16 [percent]. It is clear that Trump will be tiptoeing through the tulips with Xi and coming home empty-handed.”
Hanke is not alone among mainstream financial analysts to point out that Trump’s policies have given China an edge over America in the world economy. Bryan Riley, director of the Free Trade Initiative for a 501(c)(4) called the National Taxpayers Union, wrote last month about how Trump’s tariffs have failed to alter China’s behavior.
“Government reviews have repeatedly documented the ongoing failure of Section 301 tariffs to change China’s behavior,” Riley explained. “Ways and Means and Finance Committee Members may want to ask Amb. Greer why we should expect new Section 301 actions launched by USTR to fare any better.”
“Amb. Greer,” or U.S. Trade Representative (USTR) Jamieson Greer, was scheduled to speak before both the Senate Finance Committee and the House Ways and Means Committee about Trump’s tariffs.
“In light of USTR’s recent announcement of new Section 301 trade investigations, those committees may want to follow up on his statement to the House Appropriations Committee last week,” Riley explained. “‘In President Trump’s first term, the Section 301 tool was used to great effect.’ His comment referred to tariffs imposed following a 2017 Section 301 investigation into China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. The goal of the investigation was to reduce or eliminate China’s unfair practices in these areas.” Yet despite these goals, “subsequent reviews cast substantial doubt on the effectiveness of this action.”