At this point China’s retaliatory actions to Trump’s new tariffs on Chinese imports are fairly broad (antitrust, imports, exports, however, no restrictions on agricultural imports). But these actions are not that aggressive.

     What is most important, at this point, is how the U.S. position in the international relations system has very quickly become very precarious and transactional. It has also become unpredictable and erratic.  Trump’s use of tariffs under the International Emergency Economic Powers Act is very questionable and is subject to litigation. Such tariffs are also very questionable under WTO law. (China has just filed a WTO case against the U.S. for its new 10% tariffs.)

     Now have proposals in Congress to do away with “most-favored-nation’ treatment” for China. Trump’s trade policy toward China has been spelled out, kind of, in his memo “America First Trade Policy.” Indeed, the farm sector is the most at risk of damage because of retaliatory actions.

     Tariffs on our closest allies Canada, Mexico and the EU is only a part of his broad base and chaotic attack on the post-war system.  They will only lead to retaliatory tariffs and other trade actions (for example, restricting U.S. services). Note also Trump’s comments on Greenland, Panama, Canada and now Gaza and the UN, the ICC, the WHO as well as his actions concerning the U.S. domestic system (DOGE, Guantanamo and attacks on the civil service). This is only after two weeks of the new Trump administration.

“A crucial objection to what Trump is doing is the uncertainty he creates. The decisions by Canada and Mexico to enter a free trade agreement with the US, just like other countries chose to open their economies within the General Agreement on Tariffs and Trade and the World Trade Organization, were bets on policy stability …. Before Trump killed the WTO dispute settlement mechanism in 2019, countries used to bring and win cases against the US. The rules-governed order was not a fantasy. But it is now — thanks to Trump. The economics are at the heart of Trump’s abuse of the tariff weapon. But it is about far more than economics. The unpredictability of the US affects every aspect of its international relations …. If the US threatens friends, the latter must stand up to it. That is how to deal with bullies.” “Trump’s Tariffs.” Financial Times (Feb. 5, 2025).

“China unleashed a burst of retaliatory measures in response to President Trump’s tariff increase, resuming a long-simmering trade war between the world’s two largest economies ….  State Council, imposed 15% tariffs on U.S. coal and liquefied natural gas imports, while raising levies on crude oil, agricultural machinery and certain vehicles (but not on agricultural exports from the U.S.) …. China’s antitrust regulator opened a probe into Google, a high-profile symbol of American technological dominance, for possible antitrust violations, while adding PVH, the parent company of Tommy Hilfiger and Calvin Klein, to a list of “unreliable entities,” which could be used to restrict or ban firms from trading with or investing in China (also imposed export  restriction on rare earth minerals).” “China Retaliates.” Wall Street Journal (Feb. 5, 2025).

“Talk has finally turned into action and the first shots of the 2025 trade war have been fired. President Trump has used the International Emergency Economic Powers Act (IEEPA) to place 25 percent tariffs on products from Mexico and Canada (10 percent on Canadian “energy resources”) and 10 percent on all products from China. For all three countries, the rationale for these measures is to motivate action to address the fentanyl crisis in the United States—a pressing economic security priority that deserves immediate attention. However, counter to their intended goal, the tariffs on Mexico and Canada (which have since been delayed by one month) in particular risk undermining U.S. economic security by their direct economic repercussions; their inadequacy in motivating policy change by our partners, and their likelihood of degrading partnerships essential to countering global threats, in particular from China.” “IEEPA and Tariffs.” Petersen Institute (Feb. 5, 2025).

“American foreign policy under Trump is widely described as transactional. And rightly so. The president’s mindset could only be described as hugely inimical to international co-operation.   Trump has little regard for global norms or institutions — witness his immediate withdrawal, on taking office, of the US from the Paris climate accord (once again) and the World Health Organization. His world view is zero sum, focused on short-term wins rather than grand strategy.  The narrowness of the president’s conception of security and economic interests is exemplified by his threats to wage a 1930s-style tariff war on friends, neighbors and foes alike. And, more colorfully, by his view of alliances as protection rackets.” “Trump and Transactional Age.” Financial Times (Feb. 7, 2025).

“The chaos unleashed by Trump’s demands brought back memories of the trade battles during his first term in office. The hardline trade hawks within the new administration, led by Peter Navarro, Trump’s manufacturing and trade adviser, are setting the agenda, with the voices of more cautious officials such as Bessent muted — for now …. As it became clear over the weekend that Washington intended to impose sweeping levies without exemptions — apart from a lower rate of 10 per cent for Canadian oil — the backlash began.” “Trade Chaos.” Financial Times (Feb. 7, 2025).

“Farmers understand that trading relationships go up on a stairway, where you work hard to build them up, but go down on an elevator — very, very fast” …. Suddenly, farmers were facing the specter of retaliatory tariffs and the prospect of a full-scale conflict that some fear could decimate America’s rural heartland …. Farmers in an area of the country that has become a bedrock of support for Trump now worry that the president’s tariffs, though suspended at the last minute, have permanently damaged the image of the US in the eyes of its most important trading partners …. Free trade is the backbone of the economy in the Midwest …. Yet the prospects for farm finances could get even gloomier if Trump makes good on his threat of import levies.” “U.S. Farmers and Trade War.” Financial Times(Feb. 7, 2025).

“Weeks into Donald Trump’s second term as U.S. President, his vision of American foreign policy appears even more transactional and unilateral than during his first administration.” “Trump’s American Foreign Policy.” Foreign Policy (Feb. 9, 2025).