Public support and tariffs

that nationalism thing

Projecting our beliefs onto another society is one of the easiest things in the world. It’s perhaps human nature to assume that others respond to events in complete, if not perfect, alignment with our assessment. Unfortunately, no two humans are precisely alike, and neither are any two societies.

This is particularly true when one considers the United States and China. These two countries constitute vast segments of the world’s commerce, population, energy consumption, and other variables. But our visions of the world—the orientation of society—do not entirely coincide any more than my brother’s and my tastes: he drinks more diet soda in an hour than I have in the past decade, yet we share the love of spicy food.

We assume that China’s people will agree that unfair trade practices and its state-centric economy are unjust. We premise that China’s citizens aspire to a society like ours, with the hurly-burly freedoms of individualism. I am not convinced we can win over the Chinese people, as their government will continue fighting us tooth and nail to preserve that system. Few countries relish any evidence of vulnerability to outside forces since that would violate the most basic premise of governance: sovereignty.

But our two societies are not mirror images. With its heavy Confucian overlay, China prefers stability to our embrace of individualism and freedom and the attendant unpredictability. China generally doesn’t welcome the luan thatindividualism may create.

Americans are divided on the tariffs, of course. Even free marketeers in The Wall Street Journal warn of the dangers tariffs pose to economic growth while inflationing consumer costs and undermining the free trade norms following World War II. Yet a different segment of businessmen and women applaud the president’s actions as necessary to “level the global playing field” to give them a fairer shake at trade. We are split on this like so much else these days.

Oddly, Trump’s intervention appears to be a definite step back from the cherished Reagan commitment to “laissez-faire”, or hands-off, economics. This system theoretically operates on the strength of industries, products, and ideas competing to allow consumers to buy into products and ideas based on their appeal rather than the government’s intervention.

The tariff approach indicates a more selective application of free market principles: I will hit opponents with these taxes to bring jobs home rather than allowing Adam Smith’s “hidden hand of the marketplace” to provide those incentives. The consequences—bad or good—of these actions will unfold over time, though past experiences are hardly uniform.

Indeed, the past thirty years offer multiple reminders that free trade has benefitted many industries, where innovation incentivized growth. Meanwhile, others, such as manufacturing, have sunk under the competition from eager foreign competitors with fewer worker protections and lower labor costs. Will bringing those manufacturing jobs home provide adequate jobs to satisfy Americans in the future?

China’s system has retained a central role for the state (and Party) throughout the reform period since the late 1970s. Both foreign investment and engagement were means to improve the appalling backwardness of China’s economy after Mao’s death in 1976. Still, the Four Modernizations brought a woefully retarded system into more modern conditions. Deng Xiaoping’s often-quoted phrase that it didn’t matter whether the cat was black or white but that it caught mice acknowledged the Party might forego ideology to achieve its determination to improve the economy through whatever means possible. Those means included loosening central government planning in favor of foreign investment and technology that shamed Maoist activities over the prior quarter century. The Four Modernizations period also saw the expansion of an invasive Chinese system operating in a predatory manner against the freer Western businesses thriving on openness. It was a trade-off between radically different visions of the world, creating significant threats and benefits for our companies.

Yet the people of China don’t seem to equate that more affluent society with welcoming the unpredictability or pernicious behavior of our capitalist system, despite our reminders of its predatory behavior. Bloomberg and The Guardian noted this morning that Chinese citizens support the Party’s position on “fighting to the end” rather than demanding acquiescence to U.S. demands on tariff reversals. The complete range of specifics for Zhongnanhai’s actions is unclear, but the proof of such activity is evident. The array of actions does seem broader than Americans might deploy, such as different investigative or regulatory actions by the state or direct blocklisting of U.S. firms. China’s government will also infuse funding to stabilize the economy rather than allowing things to deteriorate.

Bloomberg cites individuals in Shanghai who excoriate our behavior as extreme or crazy. It’s easy to assume that Chinese state-controlled media drives such assessment, but the interplay between ideas and actions is more complicated. Many Chinese with international business experience recognize the same tariff implications American or European economists have.

Nationalism, a theme the Party has cultivated for seventy-five years in power, cannot be ignored as a motivating factor in people’s support for policy. China’s citizens do not appear inclined to blame their wicked regime for bad behavior, instead seeing U.S. pressure as bullying by another great power. Having nurtured the historical grievance that the Century of Humiliation intends to hold back China’s natural position as a great nation, the Chinese people appear inclined to give Party officials the benefit of the doubt on the efficacy and fairness of their actions for the Chinese nation.

Democracies allow for wide-ranging views, supporting or detracting from any policy options. Freedom of expression, arguably the single most beloved of our rights, supports the array of views on tariffs or any government actions. Chinese officials don’t confront such a range of views with a state-controlled internet, but also because the sense of anti-Chinese behavior seems so obvious. Other tariffs were paused, but not those against China. Why?

Many Americans assume that more significant pressure will guarantee that China acquiesces to President Trump’s demands on trade. I am not convinced that will occur because China’s government, despite the horrors of an authoritarian regime bent on perpetuating itself, has more popular support than we expect it to. At least, that is what we seem to confront at this juncture.

Wars are enduring activities, including trade, which can last for years. Americans have an ever-shorter tolerance for sustained activity, whether in conflict in the Middle East or paying higher prices because of tariff pain. Yet we approach things as zero-sum, which leaves less room for maneuvering to achieve the objectives. The current skirmish on bilateral tariffs with China (which Beijing just noted this morning would raise its tariffs from 84% to 125%) is only a first action; either side can back down if they choose. However, this week may signal a different assessment of national goals and strengths than we realize.

We may be misstating the objective. Are we seeking to bring jobs home or to humiliate another regime whose policies we detest? Can we win in that manner?

Time will tell.

Thank you for reading Actions today. It’s been quite a week with a range of questions arising about our contemporary world. I welcome your thoughts, questions, rebuttals on all of these topics as many of you have experience in these areas.

I appreciate your time. Thank you especially to the subscribers who enable me to read broadly to write this column.

Have a good weekend. Get outside if your weather allows. It rejuvenates us.

Be well and be safe. FIN

“China hits back at Trump with 125pc tariffs on US”, Telegraph.com, 11 April 2025, retrieved at https://www.telegraph.co.uk/business/2025/04/11/trump-tariffs-latest-ftse-100-markets-share-price-china/

Jason Douglas, Konrad Putzier, Ruth Simon, and Rafaele Huang, “The U.S. and China Are Going to Economic War—and Everyone will Suffer”, WallStreetJournal.org, 10 April 2025, retrieved at https://www.wsj.com/economy/trade/us-china-tariffs-trade-war-6f143252?mod=Searchresults_pos5&page=1

Amy Hawkins, “Life in Shanghai, China’s Commercial capital, goes on but anti-U.S. sentiment is hardening”, TheGuardian.com, 11 April 2025, retrieved at https://www.theguardian.com/world/2025/apr, /11/china-shanghai-commercial-capital-tariffs-us-sentiment-trump

David Luhnow and Kim Mackrael, “Trump says tariffs are reciprocal. They Aren’t”, WallStreetJournal.org, 7 April 2025, retrieved at https://www.wsj.com/economy/trade/trump-says-tariffs-are-reciprocal-they-arent-fa80d94e?mod=Searchresults_pos12&page=1

Allan Wang, “Next China: Standing with Xi”, Bloomberg.com, 11 April 2025, retrieved at https://www.bloomberg.com/news/newsletters/2025-04-11/china-s-public-stands-tall-with-xi-as-trump-trade-war-unfolds?cmpid=BBD041125_CN&utm_medium=email&utm_source=newsletter&utm_term=250411&utm_campaign=china