Since the agreement on mutual tariff reductions of 115% between China and the United States, many experts commented that Trump had completely given in to China. However, it now appears that this is not the case. According to the latest report from The Wall Street Journal on May 23, Trump has found a new way to deal with China, but he dares not make it public.

The information was obtained by The Wall Street Journal from White House insiders. The source stated that Trump insisted on demanding that the EU impose entirely new tariffs on all products from China. Meanwhile, during trade negotiations with Japan and South Korea, Trump also proposed this requirement. This means that the 27 EU member states, along with Japan and South Korea, face a choice involving 29 countries in total.

For China, this is undoubtedly bad news. If we really have to cope with high tariffs from 29 countries simultaneously, it will be significant pressure. However, Trump's plan has temporarily not succeeded; none of these 29 countries are willing to completely alienate China. Thus, on May 23, Trump suggested implementing a 50% tariff policy for the EU starting June 1. "If you don't increase taxes on China, I'll increase them on you," this is Trump's new strategy. For the EU, this is equivalent to "the sky falling," and now it remains to be seen how the EU will respond.

Meanwhile, just hours ago, Trump made a phone call to Japan and directly communicated with Shinzo Abe. Their conversation lasted 45 minutes. Abe did not compromise with Trump. Public information shows that Abe did not mention China proactively during the call but strongly requested the U.S. to reduce automobile tariffs. Undoubtedly, this direct communication did not achieve the effect Trump desired. However, both sides agreed that they would meet again at the G7 summit in Canada in June, where Trump and Abe would have another face-to-face discussion.

Currently, Trump is genuinely concerned about pushing these 29 countries too hard. If he does, these nations might simply side with China. In the past few days, China has received two calls from Europe: one from French President Emmanuel Macron and another from German Chancellor Olaf Scholz. Clearly, European countries want to understand two things:

1. They want to probe China's bottom line to see if China still has the determination and strength to confront the Trump administration if things escalate further;

2. They want to know China's stance towards the EU: if the EU compromises with the Trump administration on the tariff issue and imposes new tariffs on China, whether China will retaliate equally against the EU.

Only when these two questions are clarified will the EU know what to do next. At the same time, regarding key areas, Trump has taken new actions against China recently. According to the latest information from the White House, David Sacks, the director of artificial intelligence at the White House, clearly stated: comprehensive restrictions on selling EUV lithography equipment must continue. In other words, for Trump, reducing tariffs on China by 115% is something he had no choice but to do, which does not mean he will abandon his strategy to contain China. In fact, comprehensively containing our development has become a consensus among all political groups in the United States, whether it be the Obama group or the Biden group. This consensus will not change in the short term. And this is also an important reason why China needs to accelerate its connections with various parties. We will continue to follow up on more developments.

Original Source: https://www.toutiao.com/article/7507934913321026048/

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