Trump unveiled his strategy to combat the Chinese regime, focusing on reducing fentanyl imports and enhancing U.S. shipbuilding.
News Analysis
During President Donald Trump’s initial joint address to Congress on March 4, he
presented various initiatives undertaken in the first six weeks of his second term. A crucial point he raised was the threat from communist China.
Trump criticized the Chinese regime for its elevated tariffs on U.S. imports and expressed his intention to rejuvenate American shipbuilding to lessen reliance on China. He additionally noted that his administration had initiated actions to reclaim the Panama Canal from Chinese influence.
Implementing Tariffs on Chinese Goods
“For decades, other countries have applied tariffs against us, and it’s time for us to do the same to them,” Trump informed his audience.
“Countries like the European Union, China, Brazil, India, Mexico, and Canada, among others, impose significantly higher tariffs on us than we do on them. This situation is highly unfair.”
He proceeded to emphasize the statistics: “India imposes auto tariffs exceeding 100 percent. The average tariff from China on our exports is double the rate we impose on their products. South Korea’s average tariff is four times higher.”
These comments came just hours after a new
10 percent tariff on all Chinese imports was enacted. This increase, building on the prior 10 percent tariffs that took effect on February 4, serves as a direct
response to the continuous flow of illicit fentanyl from China to the United States, as per the White House.
Trump also instituted 25 percent tariffs on imports from Canada and
Mexico, effective immediately, citing both nations’ inability to restrict the flow of dangerous opioids and their precursors from China into the U.S.
The president later
granted a temporary exemption for certain goods from Mexico and Canada but opted against extending similar leniency for Chinese imports.
In response, Beijing swiftly
implemented tariffs ranging from 10 to 15 percent on a broad array of U.S. agricultural products and added numerous U.S. companies to its trade control or transaction lists.
These actions were in addition to earlier measures responding to Trump’s initial wave of tariffs, including a
15 percent tariff on LNG products and coal, 10 percent on crude oil, agricultural equipment, and heavy trucks, along with
restrictions on rare earth minerals and materials with military applications.
Chinese leader
Xi Jinping did not indicate any intention to negotiate with Trump, contrasting with the responses from Mexican and Canadian leaders earlier in January, prior to the anticipated tariff increases. Instead, Xi’s representatives took a
firm stance, asserting that the United States should independently address its domestic fentanyl crisis.
A bipartisan report issued by the House Select Committee on the Chinese Communist Party in April 2024
revealed that Beijing subsidized opioid manufacturing by providing tax incentives and grants to companies involved in producing and exporting such drugs to the Americas, despite these substances being technically illegal in China.
The report further indicated that the Chinese Communist Party (CCP) holds ownership interests in some firms that export fentanyl precursors.
Revitalizing U.S. Shipbuilding
“To strengthen our defense industrial base, we will also revive the American shipbuilding sector, which encompasses both commercial and military shipbuilding,” Trump stated.
“To facilitate this, I am announcing tonight the establishment of a new shipbuilding office within the White House that will provide special tax incentives to bring this industry back to America where it belongs.”
A leaked 2023 report from the U.S. Office of Naval Intelligence
indicated that China’s shipbuilding capabilities are over 200 times that of the United States.
In April 2024, the Office of the U.S. Trade Representative (USTR) initiated a
review of China’s shipbuilding sector following a
petition submitted by a coalition of labor unions.
The USTR
concluded that China’s leadership in the maritime sector is “unreasonable” and “impedes U.S. commerce.” In January, the USTR published its findings, asserting that China’s targeted domination in global shipbuilding and logistics is “actionable” under U.S. trade law.
Trump’s commitment to rejuvenate U.S. shipbuilding aligns with an
existing partnership between the United States and South Korea aimed at the repairs of U.S. naval vessels.
Reclaiming the Panama Canal
“To enhance our national security further, my administration will reclaim the Panama Canal, and we’ve already begun this process,” Trump proclaimed.
“Just today, a major American corporation declared that it is purchasing both ports surrounding the Panama Canal and many other related assets,” he stated, referencing an
agreement established by a consortium led by BlackRock and Hong Kong-based CK Hutchison Holdings Ltd.
Trump emphasized, “The Panama Canal was constructed by Americans for Americans, and not for others to exploit.”
Trump highlighted the historical sacrifice involved, stating, “38,000 workers perished during the construction of the Panama Canal,” describing it as a “significant sacrifice of American lives and resources.”
“They died from malaria, snake bites, and mosquito infestations. It was a perilous work environment,” he added.
In 1999, Panama assumed full control of the canal, a critical shipping route linking the Pacific Ocean and the Caribbean Sea. This transition was part of a 1977 agreement made by then-President Jimmy Carter, which included the Neutrality Treaty and the Panama Canal Treaty.
Trump asserted, “However, that agreement has been severely breached. We did not hand it over to China; we entrusted it to Panama, and now we are reclaiming it.”
On February 2, Panamanian President José Raúl Mulino
announced that Panama would not renew its participation in China’s Belt and Road Initiative (BRI). Mulino mentioned that this agreement is due to expire in two to three years but could be terminated sooner.
Launched by the CCP in
2013, the BRI, also called “One Belt, One Road,” represents a multi-billion dollar infrastructure project aimed at amplifying China’s geopolitical power.
In November 2017, Panama became the
first Latin American nation to join the CCP’s BRI, shortly after shifting its diplomatic connections from Taiwan to China.
Critics have referred to the BRI as a “debt trap,” as it offers substantial financial assistance to participants, primarily developing countries, for infrastructure projects. Nations like
Pakistan and
Sri Lanka have found themselves burdened with significant debt owed to China that they struggle to repay.
Contributions to this report were made by Andrew Thornebrooke, Dorothy Li, Frank Fang, Emel Akan, and Tom Ozimek.
