Donald Trump has done it again. This morning he began tweeting frantically and incoherently about tariffs on Chinese goods, and as a result the U.S. stock market immediately plunged. By the afternoon, Trump had shut up, and the stock market managed to recover. The thing is, Trump keeps doing this, even though he’s long ago surely figured out that it’s not getting him anywhere at all. So why is he doing it?
Trump keeps falsely stating that U.S. tariffs on Chinese goods are somehow paid by the Chinese, and that these tariff payments are benefiting the United States financially. This is of course fictional gibberish. The tariffs in question are paid by the people in the United States who are buying the goods, meaning that China isn’t paying one penny to the U.S., and accordingly, the U.S. isn’t making any money from this.
In fairness to Trump, he’s financially illiterate, and he’s surrounded by the world’s most inept economic advisers. But even they’ve surely explained to him what a tariff is. He simply doesn’t appear to care what tariffs are, or why they’re so harmful to the United States when used like this. All he knows is that the more tariffs he implements, the more damage it does to the Chinese economy. It’s about sabotaging China and nothing more.
When Trump first started doing this last year, it initially felt like a scorched earth attempt at negotiating. He was going to show China that he was willing to harm his own economy in order to harm China’s economy, to see if China would be so scared of him, it might give him a favorable trade deal. But by now it’s blindingly clear that this isn’t going to happen, and that China is willing to absorb massive short term losses if necessary, so that it doesn’t have to set a bad long-term negotiating precedent for after Trump is gone. Even Trump has surely figured that out.
So why is Donald Trump still ratcheting up his tariffs on China? Even he knows by now that it has no chance of landing him a trade deal, and that by tanking his own economy in the process, he’s sabotaging his own reelection chances, and he’s making his own Republican Party’s billionaire donors awfully nervous about him. Perhaps this isn’t about the big picture. Maybe it’s strictly about Trump’s own wallet.
Here’s the thing: Donald Trump personally owes a truckload of money to the Chinese government. Shortly before the 2016 election, the New York Times reported that Trump is part owner of a New York City skyscraper that was financed by a nearly one billion dollar loan, a large chunk of which came from the Bank of China. There are other instances of Chinese government-controlled banks holding huge stakes in Trump’s drowned-in-debt real estate empire.
It’s fair to ask the question: when Donald Trump keeps making tariff moves that sabotage the Chinese economy, while providing him absolutely no above-board benefit of any kind, is he doing it to try to pressure the Chinese government into forgiving the loans it’s made to him? Trump has a long history of borrowing money, not paying his bill, and then trying to strong-arm the people he owes money to. If he is indeed using tariffs against China for this reason, it would merely be the latest example.
Bill Palmer is the publisher of the political news outlet Palmer Report