Tariff dispute with Trump: China's true strategy revealed at Jack Wolfskin

FOCUS online Tariff dispute with Trump: China's true strategy revealed at Jack Wolfskin Alexander Görlach • 3 hours • 4 minutes reading time Markets today Chinese President Xi Jinping is countering Donald Trump's import tariffs. As the trade war between the US and the People's Republic of China escalates, the leadership in Beijing is asking itself how to escape the spiral of punitive tariffs and prevent a complete end to relations with America. All eyes are on President Xi Jinping, who has concentrated all power in his own hands during the thirteen years he has led China. He has largely paralyzed the already strictly hierarchical Chinese administrative principle, which stems from Confucianism. All levels below him now wait for directives from the next higher department before taking action. Everything takes forever, and predictions are difficult in such an environment. Especially since, in Beijing, just like in Washington, it's mostly yes-men who serve in the immediate vicinity of the leader. They lack the standing and the will to constructively object and de-escalate tensions. Beijing has reduced its economic relations with the US But what is Xi's strategy? In recent years, Beijing has begun to reduce its economic relations with the US and export fewer goods to America. During the same period that it curbed exports to the US, China has increased the flow of goods to ASEAN countries. Beijing is also trying – despite its support for Russia's war of aggression against Ukraine – to avoid violating sanctions so blatantly that the People's Republic would ultimately be punished. That would have a massive and severe impact on the Chinese economy. Beyond these points, Xi has cautiously and largely unnoticed pursued his strategy of decoupling from the US. As a result, Chinese companies have made significant purchases and expanded abroad. In the national economy, Chinese companies have sufficient liquidity to go on a shopping spree. This financial cycle looks like this: Banks that are partially or wholly owned by the state lend money to companies that are partially owned by the state or dependent on the state for their production. Acquisitions are taking place everywhere: in Germany (most recently, the Jack Wolfskin brand), Europe, Latin America, and Southeast Asia. China's Strategy to Avoid Tariffs Unlike Xi's New Silk Road Initiative, which aims to make countries politically compliant with loans for infrastructure projects, the approach of massive acquisitions actually seems to be more of a strategic economic move. Further embedding China in global supply chains, with activities in as many countries as possible, will help avoid tariffs, not just on imports into the US. In Beijing, there are fears that after 90 days, Donald Trump will approach the countries to whom he has granted a tariff reprieve and say: "Stop trading with China, then you won't have to pay penalties on your imports into the US." Companies that are partly Chinese-owned but produce outside of China could then be a lifeline for Beijing. These are all points that Xi is considering in order to keep his country afloat economically and politically should relations with Washington completely break down. Xi works strategically in the background Donald Trump, however, does not seem to be fully aware of Beijing's immense importance in international relations. When he talks about "Make America Great Again," he is apparently dreaming of a world of the last century in which the People's Republic had no geopolitical clout. Xi is working strategically in the background to be prepared for a possible conflict. Relatively unnoticed by the world, Beijing has been active on Taiwan issues. According to "The Economist" magazine, 70 countries have adopted Beijing's wording in official communiqués and statements over the past 18 months. According to this, the People's Republic has the right to use "all means" aimed at the "reunification" of Taiwan with the People's Republic. This explicitly includes military means. If Xi attacks Taiwan, these 70 countries will support him in the United Nations General Assembly. This would allow him to avoid economic sanctions for invading the island. Trump Duped Taiwan Donald Trump, meanwhile, had nothing better to do than impose punitive tariffs on this important ally of Washington and then dupe it by falsely claiming that the Taiwanese had stolen their semiconductor technology know-how from America.