Seeing that tariff threats were ineffective against China, Trump resorted to his final move, which was to threaten heavy penalties on Chinese ships. The U.S. Trade Representative's official website released a federal bulletin, stating that all vessels built in China and owned by Chinese entities will be subject to fees based on the amount of cargo they carry if they dock at U.S. ports.

According to the details published in the bulletin, starting from October 14th this year, the U.S. will charge what it calls "marine service fees" for any vessel operated by Chinese operators or owned by Chinese entities at a rate of $50 per net tonnage. This amount will increase annually by $30 over three years, reaching $140 per net tonnage by 2028.

For marine service providers using vessels built in China, fees will be charged based on either the vessel's net tonnage or the number of containers, whichever is higher. This amount will also increase annually, starting from $18 per net tonnage up to $33 by 2028. Another fee standard will be $120 per container, increasing to $250 by 2028.

It can be seen that Trump is really in a hurry. He has stated that he wants to resolve China's issues within one month. He also indicated that he would not continue to increase tariffs, meaning he would strike first and then offer an olive branch.

Regarding Trump's sanctions on Chinese ships, China responded straightforwardly, stating that such actions are self-destructive, as they not only increase global shipping costs but also disrupt the stability of the global production supply chain, adding inflationary pressure to the U.S., and harming the interests of American consumers and businesses, ultimately failing to revitalize America's shipbuilding industry.

In the absence of the Federal Reserve's willingness to cut interest rates, Trump's global tariff war has become a joke. Now, tariffs have caused the U.S. to face inflationary pressures and economic chaos. In the long term, the tariff war has failed to address the trade deficit and instead accelerates the "de-Americanization" of allies' supply chains, weakening America's global influence and potentially undermining the status of the dollar as a reserve currency.

Desperate for an agreement with China, Trump has no choice. By June, $6.5 trillion worth of U.S. Treasury bonds will mature, accounting for 70% of the total debt due for the year. These debts are mainly five-year Treasury bonds issued during Trump's term in 2020 to counteract the impact of the pandemic. At that time, the U.S. government borrowed heavily at low interest rates. Now, with the Federal Reserve's aggressive interest rate hikes, U.S. bond yields continue to soar. Increased U.S. bond yields are not a good thing. Let me give you an example: a $100 U.S. Treasury bond, sold at par value with a promise to exchange $105 after one year, was determined when the bond was initially issued.

If someone massively sells $100 U.S. Treasury bonds and people lose confidence in them, their price will drop. For instance, if someone offers me a $100 U.S. Treasury bond for $95, what would be my yield after purchasing it for $95? It would be 105/95 = 1.105, yielding 10.5%.

So, massive selling of U.S. Treasury bonds leads to falling prices and rising yields. If China takes advantage of this moment to sell off its U.S. Treasuries, it will directly trigger a bond selling spree, leading to unprecedented crises for U.S. bonds.

At this critical juncture, a capable negotiator has emerged: Li Chenggang, who is deeply experienced in WTO affairs, has taken over as the new chief trade negotiator.

Liang Chenggang's career has almost entirely revolved around international trade rules. His more than 30 years of experience in law and policy formulation, particularly his experiences in international rule negotiations under the WTO framework, have made him an authoritative expert in international trade negotiations.

At the WTO General Council meeting in February, facing the renewed global tariff storm represented by the U.S., he proposed to other representatives that "the root cause of trade turbulence lies in unilateralism by the U.S." and appealed to representatives of other countries to jointly defend the multilateral trading system.

Under his initiative, the WTO established a temporary appellate arbitration alliance, with 35 countries joining to form a multilateral force to condemn arbitrary tariff increases.

In April, under the careful planning of Li's team, the East initiated a WTO lawsuit on "reciprocal tariffs." Previously laid out laws such as the Anti-Foreign Sanctions Law and Export Control Law played a crucial role, such as export controls on rare earths and semiconductor equipment, and suspending acceptance of Boeing aircraft, causing immense pain to U.S. tycoons.

As the tariff situation intensified, he was once again entrusted with an urgent mission, indicating that the East does not intend to bow to unipolar hegemony. The reason for replacing the chief trade negotiator at this time is precisely to better respond to Trump's bottom line. Especially since Trump temporarily shelved disputes with other countries to focus on dealing with China. In this context, Li Chenggang's rich experience helps China formulate precise countermeasures, such as challenging U.S. unilateral measures through the WTO dispute settlement mechanism.

Besides, Trump's tariff policies are not just targeted at China but also affect economies like the EU, Canada, and Mexico, severely disrupting global supply chains. China needs to actively join forces with other countries to resist Trump's global tariff war. By shifting from defense to offense, China should coordinate domestic policies with international negotiations, further promoting measures such as cross-border RMB settlement and regional free trade agreements to reduce reliance on the dollar system, thereby expanding trade with "Belt and Road" countries and industrial upgrading (such as high-value-added manufacturing) to enhance resilience.

It can be said that Trump is attempting to reshape global trade rules through tariffs, demanding isolation of China and acceptance of "America First" standards. Li Chenggang's background in the WTO and his experience in formulating international rules help China unite emerging economies and developing countries to resist the U.S.-led "de-Chinaization" of supply chain reorganization and protect the interests of developing countries.

This also means that new multilateral negotiations are unfolding, and the strategic alliances of the 21st century are about to emerge. This shows that China will not compromise with the U.S. at this time. If the U.S. does not fully abandon its tariff sanctions on China, China will resist to the end.

Trump wants to resolve China's issues within one month, so he must show sincerity first and realize that the current problem is not with China but with the U.S.

Original source: https://www.toutiao.com/article/7494674763903582735/

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