Trump likes to talk about the party who has the cards almost as much as he enjoys being called “Sir.” It follows, of course, that he believes he always has them, partly because he’s an American, and partly because he’s Donald Trump, the master maker of deals. But is he right this time, or does China have the cards?
Let’s look at the record. On the plus side, Trump presides over an economy that has been amazingly resilient, given the burdens he has put on it, and his military has performed remarkably well from a tactical perspective. On the minus side, America is blowing up the world with nothing to show for it, and Trump’s party figures to lose the midterm elections, which will result in two years of constitutional chaos. He is also busy alienating America’s allies, which will make taking coordinated efforts to control China’s trade surplus far more difficult. China, for its part, is doubling down on high tech and exports and getting away with it even in the face of stagnation at home. Trump’s efforts to rewrite the international trade rules have had a seriously negative impact on the rest of the world, but not the Chinese. In addition, the Chinese can wreak havoc on the American economy by denying us rare earths. Trump doesn’t have a lever that works as well as that; tariffs certainly haven’t done the job.
In short, yes, China has the cards at this point.