Trump's 'China recession collapse' cycle misjudged, Xi Jinping 'accelerates confrontation and cracks down on allies'

Trump's 'China recession collapse' cycle misjudged, Xi Jinping 'accelerates confrontation and cracks down on allies'

The Trump regime's tariff attack was caused by a misjudgement that 'China's recession and tariff acceleration will collapse the middle class', and the Xi Jinping regime is preparing for a long time to respond, and is enduring the worsening situation with 'Trump's heightened risk', and the economic confrontation between the two sides is prolonging due to the 'acceleration of recession with the US' strategy.
Ahead of the meeting between the two sides in Switzerland, 'Point Affairs', a contribution by a China expert from the Council on Foreign Relations, stated that "China's response to US tariffs is the execution of a long-coordinated strategy, and unlike many US allies who were caught off guard by Trump's tactics, it has been preparing for confrontation for years," and that "Since 2018, China has endured a low-level trade war, gained experience in managing the deepening US-China competition, and learned how to circumvent US economic sanctions." Zoe Liu, a senior fellow at the Council on Foreign Relations, pointed out the gap between the two systems as the reason for the failure of the Trump regime’s negotiations: “The Trump administration believed that a comprehensive trade deal could be reached through direct personal dialogue between Trump and Xi Jinping, but Xi Jinping does not negotiate.” 

“Xi Jinping maintains imperialist aloofness, blessing agreements made by others, and standing above the daily battles of governance, while Trump seeks media attention to generate political capital, insists that all achievements are made with a high-profile voice, and directly pushes forward the tariff agenda by positioning himself as the ‘chief negotiator. ’”

He said, “China’s slowdown is not automatically favorable to the United States,” adding, “Advanced economies grew by an average of 1.7% last year, with the U.S. economy growing the fastest at 2.8%, but its momentum has plummeted, and JP Morgan forecasts a negative U.S. growth rate in the second half of 2025, while China’s official growth rate is expected to drop to 4.6%,” and he viewed the “slump in U.S. growth as greater and faster.”

He continued, “In early March, Commerce Secretary Howard Rutnick told NBC News, ‘Trump is bringing growth to the U.S. I would never bet on a recession. That’s not going to happen,’ which contributed to the Trump administration overestimating the likelihood that tariffs would bring China to the negotiating table,” adding, “The U.S. strategy has backfired, significantly reducing the possibility of direct negotiations where China can make meaningful concessions, and China has shown strong retaliatory capabilities and tactical openness to negotiations, but is unwilling to make concessions.”

He said, “More importantly, Xi Jinping’s national revitalization measure is not GDP but science and technology development, so Trump’s ‘America First’ policy agenda has in turn strengthened Xi Jinping’s insistence on domestic innovation and self-reliance in China,” and “Unlike the first term of the Trump administration, China is now ready to decouple from the United States if necessary.”

Regarding the misjudgment of the ‘Chinese economic recession’ by the US hawks led by tariffs, he said, “The analysis that the Chinese leadership was desperate for trade negotiations to avoid economic pain that could destabilize Chinese society and threaten the Chinese Communist Party’s monopoly on power has led many to the wrong conclusion,” and “China’s economic growth today is weaker than at any time in the past 30 years, but US Treasury Secretary Scott Bessent, who is involved in tariff negotiations, has repeatedly said, ‘It’s not a recession, but it’s not a serious recession,’” and attributed this to the Trump camp’s ‘misjudgment of the Chinese socialist economic cycle downturn.’

The New York Times reported on the 10th that Peter Navarro, a hawkish trade adviser to President Trump who is at the epicenter of the Chinese economic slowdown and the architect and commander of the tariff war, was not scheduled to attend the Swiss meeting.

He diagnosed that Trump's confrontational trade policy was designed to weaken China, but paradoxically strengthened President Xi's narrative, and that threats from outside China have become a barrier to the Chinese Communist Party's continued economic restructuring, justifying China's drive for self-reliance, and also allowing President Xi to avoid criticism for his past policy mistake of "the administration's punitive attitude toward private companies." “This rush to show progress on a ‘deal’ reflects the growing desperation within the administration to roll back tariffs before they hit GDP growth and inflation,” Paul Ashworth, chief North American economist at Capital Economics, wrote in a report to clients on Sept. 9. “As fears of impending shortages in the U.S. grow amid a sharp decline in container ship arrivals from China, pressure is growing on the Trump administration to moderate tariff increases.” 

The New York Times reported on the 10th about the Swiss meeting, “Capital Economics estimates that if the U.S. lowers its tariffs on China to 54%, the overall effective tariff rate on U.S. imports would fall from 23% to 15%, and the Fed’s growth and inflation forecasts would be back in line with estimates made earlier this year based on Trump’s campaign pledges.” 

It added, “It’s still unclear whether President Trump will accept the 54% tariff rate, but on the 9th, Trump gave Swiss negotiator and Treasury Secretary Bessent the authority to negotiate, writing on his Truth Social, “I think an 80% tariff on China sounds right! Even Scott B.”,” indicating that negotiations would be negotiated through tariff reductions.

 Regarding China's biggest challenge, Joy said, "Faced with domestic and foreign growth headwinds, China has been struggling with difficult budget constraints due to capital shortages, while more money has been poured into technology, resulting in fewer assets for households." 

Unlike the national crisis of COVID-19, US-China tensions have jeopardized access to global education and career advancement, weakening economic stability as the younger generation increasingly resists 'mortgaging the future' led by the aging political elite.

 

The Republican Party's hard-line conservative Reaganomics attempted to accelerate the economic downturn and collapse of the Soviet heavy industry economy, which had slow production lines, by increasing supply and by increasing the extreme military buildup, which was a strategy to collapse the Soviet Union by 'breaking the backbone of the socialist economic system' and escalating the nuclear war since the early 1980s. 

The Soviet Union dedicated the Communist Party's assets to the state and dissolved the Union, entering 'reconstruction through elections' with perestroika. 

The military buildup of Reaganomics caused a financial crisis due to the twin deficits of the fiscal deficit caused by the increase in rigid spending and the expansion of the trade deficit due to the outbreak of many international local wars, and handed over the government to the Democratic Party. 

The Reagan regime's crisis escalation method, which disguised the strategic group's secret 'socialist economic breakdown' strategy as a nuclear war with the Soviet Union as an open policy of the government, seems to have been prepared as a strategy that maximized the effectiveness of the socialist economy in analyzing capitalism and business cycles through the Soviet Union's response strategy in China for 40 years.

During the election campaign last year, President Trump criticized Federal Reserve Chairman Powell as the “enemy of America” in August, and directly pointed out Arthur Laffer, a former professor at the University of Chicago and a theorist of tax cuts and supply-side economics during the Reagan administration, in an interview with Bloomberg Businessweek.
The “Laffer Curve,” which was a secret strategy for economic revival and the war-oriented theory of the Reagan administration’s arms buildup, was evaluated as a “political tactic” based on “effectiveness propaganda” as it failed to theoretically and clearly prevent the “tax cut to stimulate corporate investment” strategy or “the point of the highest corporate investment expansion on the tax cut curve” from being graphed. The “Reagan pledge of tax cuts,” which was the cause of the failure of Reaganomics, eventually led to the collapse of the political base as the fiscal deficit expanded and the sudden change to declare a “tax increase policy.”

The Reagan administration attempted to lower the marginal income tax rate by 25 percentage points for three years through the 1981 ‘ETRA (Economic Recovery Tax Act)’ tax cut, lower the top income tax rate from 70% to 50%, and lower the capital income tax rate from 28% to 20%, but this resulted in twin deficits of fiscal deficit and trade deficit. Trump’s trade advisor Navarro theorized ‘achievement of simultaneous reduction of trade deficit and revival of the US economy through tariffs’, but it is evaluated as a reenactment of the ‘Laffer Curve’ political propaganda that is overly simplistic and lacks economic analysis.

See <China's Oversupply Strengthens Capitalist Countries' 'Overproduction Panic' System Competition, May 29, 2024> 

<Fiscal Deficit, Military Buildup, Supply Expansion, Reaganomics Return, August 29, 2019> 

<US-China Economic System Clashes Due to Nuclear Reduction Treaty Termination, October 23, 2018>