WSJ "US Launches 'China Isolation Strategy' by Pressuring Tariff Negotiation Countries"

Pressure Led by Secretary Mnuchin to Restrict Trade with China

AP Yonhap News

The Wall Street Journal (WSJ) reported on the 15th (local time) that the United States is adopting a strategy to isolate the Chinese economy by pressuring trade partners to cut ties with China in exchange for lowering tariff rates in future trade negotiations.

A source revealed that on the 6th, at a meeting held at Mar-a-Lago, U.S. Treasury Secretary Steven Mnuchin proposed to President Donald Trump a plan to pressure trade partners to prevent China from circumventing U.S. tariff barriers. The U.S. requests trade negotiation partners to lower tariff barriers in exchange for blocking China from transporting goods through those countries or preventing Chinese companies from establishing entities there to bypass the 'tariff bomb.'

WSJ interpreted, "The specific conditions demanded by the U.S. may vary depending on the degree of economic ties between China and each country," adding, "These U.S. measures aim to strike the already unstable Chinese economy to pressure China to come to the negotiating table." However, WSJ also noted that some countries currently in initial talks with the U.S. have not received demands related to China, making it unclear whether all countries will be presented with conditions to isolate China.

Despite such U.S. pressure, China appears to be conducting independent trade diplomacy, signing dozens of agreements with Vietnam and others. Peter Harrell, former senior director for international economics at the White House, pointed out at a discussion held at Georgetown University Law Center on the same day that China views President Trump's tariff strategy as an opportunity. Harrell assessed, "Economically, China is bound to face difficulties, but politically, it is responding quite skillfully."