There are two big takeaways from US President Donald Trump’s first day in office this week. First, he is going to give policymakers, businesspeople, political leaders and anyone who cares about global affairs a fair bit of whiplash as we all try to follow the multitude of initiatives he is pursuing, or changing his mind about. Second, and most importantly, is that despite all his bluster, the man is afraid of China.
Any analysis of Trump’s journey to the White House will indicate that he was gearing up for major action on China. But when the moment came for him to act, Trump caved. Time will now tell whether he is a coward, a politician who speaks with a forked tongue, or a deeply misunderstood man.
Trump has painted China as the great bogeyman of our times. In 2019, in a series of posts on Twitter (now X) that rattled markets, he posed a question to his more than 60-million followers in which he compared Chinese President Xi Jinping to US Federal Reserve chair Jerome Powell.
“My only question is, who is our bigger enemy: Jay Powell or Chairman Xi?” Trump wrote. (Fun fact for monetary policy wonks: did you know that Powell’s Princeton University thesis in 1975 was titled “South Africa: Forces for Change”?)
In October 2024, just before he won the election, Trump told The Wall Street Journal’s editorial board that if he returned to the White House, China would not dare provoke him because Xi “respects me and he knows I’m [expletive] crazy”.
On the campaign trail and after his win in November, he vowed that he would impose huge tariffs on China, Mexico, Canada and other countries.
“On January 20, as one of my many first executive orders, I will sign all necessary documents to charge Mexico and Canada a 25% tariff on all products coming into the US, and its ridiculous open borders,” he wrote on his social media app Truth Social on November 26. In another post, Trump said he would also slap China with a 10% tariff, “above any additional tariffs”, on all its products entering the US in response to what he said was its failure to tackle fentanyl smuggling.
The day before his about-turn [on TikTok] Trump had what he described as a ‘very good call’ with Xi. Was he scared into submission?
In fact, these were watered-down threats. In September last year he told a crowd in Flint, Michigan, that “tariffs are the greatest thing ever invented” and called himself “tariff man”. He proposed an eye-watering 60% tariff on goods from China — and a tariff of up to 20% on everything else the US imports.
Yet on Monday, as he signed several executive orders after his inauguration, this central plank of his campaign did not come to fruition at all. Instead of carrying out his threats against China, Trump signed an executive order directing various agencies to study a wide variety of trade issues with an eye towards future tariffs, but he did not impose any new levies immediately. The order directed his officials to deliver reports to him by April 1 assessing unfair trade practices, currency manipulation, US technology controls and discriminatory foreign taxes.
It had all been bluster.
Is Trump afraid of China? The TikTok debacle is instructive. In July 2020 Trump said: “As far as [the Chinese-owned social media app] TikTok is concerned, we’re banning them from the US.”
A month later he signed an executive order seeking to ban the app. Last Saturday, two days before his inauguration, he announced that one of his first moves upon returning to office on Monday would be to sign an executive order that delays a ban the US Supreme Court had upheld just days before.
After his swearing-in ceremony on Monday, Trump did indeed sign an executive order to delay enforcement of the TikTok ban by 75 days. Why, though, given that his own Republican and Democrat lawmakers had been united in curbing TikTok on national security grounds? Interestingly, the day before his about-turn Trump had what he described as a “very good call” with Xi. Was he scared into submission?
It’s all a riddle wrapped in a mystery inside an enigma, as Winston Churchill said about the Soviet Union. Yet two things have now been revealed which may help us navigate the next four years: Trump is going to flip-flop on many issues, and Trump is going to be very careful around China and its interests.
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