Trump's Tariff Pressure: Are Xi Jinping's "Four Red Lines" Exposed?

U.S. President Donald Trump. (Photo by Chip Somodevilla/Getty Images)

[People News] With Donald Trump's victory in the 2024 U.S. presidential election, the Chinese Communist Party (CCP) is on edge. From Zhongnanhai to state media, think tanks, and social media, the hottest topics revolve around Trump's cabinet formation and potential tariffs on China. In response, Xi Jinping hastily took down the "East Rising, West Declining" banner and began emphasizing "mutual benefits of U.S.-China cooperation and mutual harm from confrontation." Clearly, he's alarmed. Trump's first term ended the era of appeasement toward China with a trade war, and his second term promises a thunderous crackdown on the CCP.

From November 13 to 20, Reuters conducted a survey of more than 50 economic experts from inside and outside China. The findings showed that the majority of respondents expect Trump to impose additional tariffs on Chinese imports early next year, with a median rate forecast of 38%. These tariffs could potentially reduce China’s economic growth rate in 2025 by 0.5 to 1 percentage point. Trump's stated tariff goal for China is 60%, but he has also indicated that if China blockades or invades Taiwan, the tariff rate could increase to 100% or even 200%.

In September, the Chinese Communist Party (CCP) employed various large-scale monetary, fiscal, stock market, and real estate stimulus measures to boost the economy, hoping to maintain a 5% GDP growth target for the year. October's economic data suggested these policies had a modest effect, with slight improvements in industrial output, investment, and consumption. However, the real estate sector remains mired in a severe downturn. Ultimately, the challenge of hitting the 5% GDP target may fall to the CCP's National Bureau of Statistics, propaganda department, and cyberspace administration—the "new three horsemen."

Next year looks even grimmer. Goldman Sachs' Chief China Economist, Hui Shan, identified U.S. tariff policy as the largest uncertainty for China's economy in 2024. Goldman predicts that China’s GDP growth will slow to 4.5% in 2025. UBS’s Head of Asian Economic Research and Chief China Economist, Wang Tao, recently released a report stating that if the U.S. phases in higher tariffs starting in September 2025, China’s GDP growth could drop to 4% in 2025 and plummet to 3% in 2026, even with additional domestic stimulus.

In an effort to mitigate the impending export pressure, Xi Jinping has been engaging in intensive diplomacy in South America, attempting to rally Global South nations. However, no single country can replace the $300 billion trade surplus China enjoys annually with the U.S. Even Brazil, China’s largest ally in Latin America and a trade surplus partner, has shown reluctance. While Brazilian President Luiz Inácio Lula da Silva greeted Xi with a warm embrace, he refused to sign onto the CCP’s Belt and Road Initiative.

As the Chinese saying goes, "misfortunes never come singly." While Trump’s tariff measures loom, the U.S. Congress has already turned its sights on Beijing. According to Voice of America, on November 19, the U.S.-China Economic and Security Review Commission (USCC) submitted its 2024 annual report to Congress. The report proposed a series of policies that could fundamentally reshape the U.S.-China economic and technological competition, including, for the first time, recommending the revocation of China’s Permanent Normal Trade Relations (PNTR) status.

On November 14, John Moolenaar, Chair of the House Select Committee on the Chinese Communist Party (CCP) and Republican Representative from Michigan, introduced a bill to revoke China's Permanent Normal Trade Relations (PNTR) status. If passed, this would impose a baseline 35% tariff on Chinese goods, with potential increases to 100%. The impact of such a move on the CCP would rival, if not exceed, the damage caused by Trump-era tariffs.

Securing PNTR status was a significant milestone for the CCP, achieved at great cost. Before China's accession to the World Trade Organization (WTO) in 2001, Beijing invested heavily in influencing U.S. politics, including large donations to Bill Clinton's presidential campaign. According to the 105th Congress report titled "Investigation of Illegal or Improper Activities Related to 1996 Federal Election Campaigns," two Democratic National Committee fundraisers, acting as CCP agents, raised or contributed nearly 80% of the $2.8256 million in questionable donations. Following his election, Clinton established a "China Room" in the White House, personally lobbying skeptical members of Congress to approve PNTR for China. This paved the way for China’s WTO entry the following year. Clinton’s role was pivotal, making him the largest enabler of China’s economic integration into the global system.

The CCP also spent lavishly on American business leaders to advocate for its cause. Wei Jingsheng, a prominent Chinese dissident and founder of Beijing’s Democracy Wall movement, recalled being driven by a U.S. congressman to the home of the U.S.-China Relations Committee chair, where 20-30 American corporate executives urged him to support China’s PNTR. At the time, public opinion polls by major U.S. newspapers, regardless of political leanings, showed that about 70% of Americans opposed granting China PNTR and WTO membership. However, the CCP’s strategic pressure on Congress and the Clinton administration secured its entry ticket. Decades later, instead of fostering economic and political liberalization, China used its growing economic power to strengthen its authoritarian rule, export communist ideology, and engage in military expansionism, posing a direct challenge to Western democracies.

Trump’s first term marked a turning point, ending America’s appeasement toward China. This alarmed the CCP. While the Biden administration has retained Trump’s tariffs and introduced a "small yard, high fence" strategy to restrict China’s access to critical technologies, its overall approach has lacked the strength to decisively counter Beijing, with actions often failing to match rhetoric. With Trump’s return in 2024, Beijing’s fear has deepened.

During the APEC summit in Lima, Peru, Xi Jinping met with Joe Biden and outlined what he called the "Four Red Lines," demanding non-interference on Taiwan, democracy and human rights, China's political system, and its development rights. While these statements appeared assertive, they reveal the CCP’s underlying anxiety. With Trump 2.0 on the horizon, Xi and the CCP face unprecedented pressure, trying to put on a brave front by "whistling in the dark" as they brace for what lies ahead.

On November 19, Trump announced his pick for Secretary of Commerce: Wall Street billionaire Howard Lutnick, another China hawk, adding to the "Dream Team" of Trump's cabinet. According to Politico, former U.S. Trade Representative Robert Lighthizer and his allies are already laying the groundwork for Trump's large-scale new tariffs. Analysts predict Lighthizer may be appointed as U.S. Trade Representative or Treasury Secretary, which would be another nightmare for the Chinese Communist Party (CCP).

Currently, the CCP is as anxious as ants on a hot pan. According to a recent Financial Times report, former senior White House Asia affairs official Evan Medeiros stated that Trump’s victory caught China "off guard." As a result, the CCP is frantically seeking connections in Washington and New York to establish ties with Trump. Georgetown University professor Medeiros revealed that he met with Chinese Ambassador Xie Feng before the election. He noted, "Their strategy is basically just one thing: convincing business leaders around Trump to adopt a soft stance toward China."

What tricks can the CCP come up with? Nothing new—if one pile of money doesn’t work, they’ll try two. Bribing Trump’s team seems to be their plan. However, this time, the CCP is completely miscalculating. The hawkish team led by figures like Marco Rubio and Mike Waltz is not going to be bought. During Trump’s first term, Xi Jinping deceived him twice on trade agreements and the COVID-19 issue. With Trump’s return as the "Avenger," the bitter memories remain fresh. This time, Xi Jinping and the CCP will have no choice but to suffer the consequences.

(First published in People News)