Gordon Chang: This Is Why Trump Holds 'Almost All' Of The Leverage Over China In Tariff Talks

Forbes Breaking News

On "Forbes Newsroom," author and U.S.-China relations expert Gordon Chang discussed why he believes President Trump wields great leverage over China in tariff negotiations.

Transcript

00:00Who do you think then has more cards right now? Do you think the United States does? Or do you

00:05think China does? Because I know you're saying this looks like a Jedi mind trick, art of the

00:10deal from President Trump. Others are interpreting this as he's folding first. So who has the leverage

00:16right now? Well, if you look at objective factors, President Trump holds almost all of them. So for

00:22instance, the Chinese economy is less than two thirds the size of ours. China is the trade

00:28surplus country. Last year, its merchandise trade surplus against the US was $295.4 billion.

00:34That was up 5.8% from 2023. The Chinese economy is not growing at the 5.4% that they reported for Q1.

00:44It's probably somewhere around zero. But we also know wherever it is, Brittany, and we don't really

00:50know. Wherever it is, it's heading to zero because we saw the price data for February and March,

00:56which showed that China's in a deflationary spiral. We saw the tax receipts for Q1 down 3.5%.

01:03So Xi Jinping is in a very difficult position. And by the way, we're hearing all of this anecdotal

01:10information about factories in China closing. The only card that Xi Jinping has is pressuring Trump

01:18through Wall Street, Main Street, farmers, C-suites to get Trump to back down. Trump is pretty determined.

01:28He believes in tariffs. We know that because he continually has talked about them. He's studied

01:34them. So Xi Jinping has one card. And it might be the card that gets everything, but I don't think so.

01:44I think Trump is the one who succeeds in this.

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