Beijing remains consistent, firm despite impulsive levies

Shortly after China and the United States announced tariff adjustment measures in Geneva, Switzerland, Pulitzer Prize-nominated journalist Aron Solomon argued in a Newsweek article that the US now has an administration that "governs not with strategy but with impulse".

The primary architect and advocate of the extraordinarily reckless White House tariff project — widely labeled a "tariff tantrum" by leading Western media outlets — is Peter Navarro, key adviser to US President Donald Trump and professor emeritus of the University of California, Irvine, according to The New York Times.

Navarro's distorting, paramount influence underpins and helps explain Solomon's conclusion that the entire saga, which has unfolded since the US administration's "Liberation Day" announcement on April 2, reveals "a total absence of strategic thinking".

By early May, however, Navarro's influence on the decision-making process was starkly waning.

As BBC reported, prior to the Geneva meeting, the US had already indicated — without any concession from China — how the US-China tariffs should be significantly cut, signaling that the White House was now urgently looking for a de-escalating deal.

In the end, the US and China swiftly agreed to ease trade tensions, each slashing sharply its escalated, post-April tariffs and pausing the rest for at least 90 days, resulting in hugely reduced tariff rates of 30 percent in the US and 10 percent in China.

"Rarely has an economic policy been repudiated as soundly, and as quickly, as President Trump's Liberation Day tariffs — and by Mr. Trump's own hand," said the Wall Street Journal.

So what prompted this dramatic reverse gear?

First, China's response was insistent, yet calm, each day following the US' April 2 announcement. Unlike other rattled nations, including long-term US allies, China showed zero interest in scrambling to engage in intimidating negotiations.

China's swift, measured and intense countermeasures comprehensively confirmed that it would not be bullied by the US.

Its approach dramatically set it apart from most of the other major Western powers startled by the US' tariff frenzy. The Global South — and the rest of the world — took note.

Next, mounting internal pressures in the US were sending alarming signals. Apart from the huge initial turmoil in the US stock and bond markets, it became impossible to ignore the raft of very sharp price increases and shortage problems steadily descending on US consumers because of the tariffs.

The White House's political marketing about "some pain presaging beautiful gains" was woefully ineffectual from the start, as the grim facts spoke for themselves.

The US' tariff project was basically shutting down its access to China's vital, unmatchable value-for-money manufacturing prowess. Trading stock held in the US provided a short-term cushion, but shelves were already emptying and prices were soaring. For example, fundamental livelihood supplies for US babies, such as cribs and strollers, were gravely threatened.

Moreover, shipping across the Pacific was shrinking and US dock workers, truck drivers and logistics workers were sitting idle for extended periods and voicing their complaints.

May is also the month when US suppliers begin stocking up for the Christmas holiday — and that restocking, especially from China, was largely on hold. "Trump ruins Christmas" headlines were taking shape.

Rising prices risked the country's "Make America Great Again" slogan, and triggered the realization that all these "beautiful tariffs" actually comprise a colossal increase in the sales tax regime, ultimately designed to sustain massive income tax cuts for the richest of US citizens.

Geopolitically, the tariff turmoil unleashed by Washington helped boost the standing of "safe-hands "successful incumbents in recent elections in Australia, Canada and Singapore. At the same time, major international initial public offerings are migrating from New York to Hong Kong.

Unsurprisingly, the US administration's approval rating dropped across a range of national polls, as predictions from leading economists of higher inflation and a possible recession in the US intensified. Topping this off was the commentary highlighting how the tariff episode has further compromised the US dollar's role as the world's reserve currency.

Meanwhile, it was business as usual in China.

President Xi Jinping made an important Southeast Asia tour shortly after April 2. More recently, Beijing hosted a pivotal forum with the 33-member Community of Latin American and Caribbean States. Two-thirds of Latin American countries have now joined the China-proposed Belt and Road Initiative.

In his keynote speech at the Beijing meeting, Xi reiterated that "there are no winners in tariff wars and trade wars" and "bullying or hegemonism only leads to self-isolation".

China's formal response to the tariff mayhem has been robust and consistent and devoid of cocky speeches and strange "announcements about coming announcements", which were evident in the White House's approach.

"America's trade policy is being run like a weekend garage sale," said Solomon, the Pulitzer Prize-nominated journalist, adding that "prices change by the hour, rules are made up on the fly — but unlike a garage sale, no one seems to know who is in charge".

The author is an adjunct professor in the faculty of law, Hong Kong University.