The song by Phil Collins, of the 1980s, with iconic lyrics and video, seems to match perfectly with these confused days.
An unspeakable mix of arrogance, coarse and limping rants, clumsy elegance, endless lies, blatant political and economic incompetence, short-sighted visions based on theories badly copied from the past, together with unlikely pin-ups as spokespersons, violent, alcoholics second-line journos at the helm of enormous military apparatuses, stock market investors as regulators of commerce, personalities affected by autism, depression, drug addiction and enormous wealth. This, for the head comedian and his buffoons; followed by a claque of European and Latin American pathetic leaders-servants and a hostile, quarrelsome and worried audience (the rest of the world). This seems like the world. But it is not all, and only, this (fortunately and not).
On Wednesday 2 April, the US introduced sweeping tariffs targeting all its major trading partners. President Donald Trump has called it Liberation Day. In Europe, and elsewhere it’s widely seen as the hostile action of a president who appear to be affected by serious behavioral disorders.
If Europe (and the world as well) is going to get through the next four years, like it or not, and it is needed to keep a proper view and try to analyze and manage a new landscape. Despite the wide consideration in the US and abroad, that the voters of Trump are ignorant, boors and bigots (many are, but not all), the reality is more complex, starting that no one wins the US presidency twice if they’re a fool (he can be a serial layer, unpredictable, six-times bankrupted, undecided, sexual predator, fake anti-woke crusader, insider trader, or tied with mafia consigliori). Nor is there intrinsic foolishness in the imposition of tariffs. It’s true the US is hurting itself (tariffs cause inflation). But countries or blocs with a trading surplus, like China and the EU, will be hurt more.
There’s nothing mad in the tariffs or new in the US economic history. Till the end of WWII these where a pillar of the US economic system, including a president like McKinley that was named as ‘king of tariffs’ (he also promoted a brutal imperialism, with the annexation of the independent Republic of Hawaii in 1898. He entered in war with Spain after a dubious sinking of a US warship and annexed Puerto Rico, Guam and the Philippines, this while Cuba was promised independence but remained under the control of the US until May 1902. In the Philippines, a pro-independence rebellion was eventually crushed. Then acquired what is now American Samoa when his administration partitioned the Samoan Islands with Great Britain and Germany and end up killed by an anarchist); tariffs where largely imposed, just looking into recent times by presidents Richard Nixon, Ronald Reagan, Bill Clinton and George W. Bush. It’s easy to forget this trend because Barack Obama avoided major tariffs, even though he had a bone to pick, while Joe Biden eased the tariffs imposed by Trump in his first term.
Those first-term Trump tariffs had the same purpose the new ones have: to force countries to the negotiating table and reach new deals more favorable to the US. By 2020, negotiation process of the first Trump administration reduced some tariffs but there was no enough time for a comprehensive deal in a one-term presidency.
The incumbent US Treasury Secretary, Scott Bessent, says upfront the aim is negotiation, even if seems that he plays the good cop (the bad cop is the Secretary of Commerce Luttnik). The US has, indeed, showed already flexibility with Mexico and Canada, which have offered new terms.
Neither foolish nor mad, the tariffs are the opening bid of a rational negotiator. It would be a banal observation made about anyone else. But this is Trump (sadly) and we’ve consoled ourselves into labelling him as a Caligula. There is a rationality behind his confused behavior, but a rational actor isn’t necessarily acting wisely or it is based on proper conceptual framework.
As just said, it is very tempting to see Trump as lunatic due because of his aggressive rhetoric and insulting rants. He’s ready to start a trade war so we see him as, well, war-like. However, each one of his belligerent policies and statements is deeply defensive in reality.
It is clear that Trump believes the US is in deep trouble unless radical corrective action is taken. Its unprecedented level of debt puts the economy at risk. The erosion of its manufacturing base makes the US dependent on supply chains that can be cut off, including supplies necessary for the tech industry (however this de-industrialization process was promoted by the same financial and economic groups that supported him, but not with the perspective of the massive return of the plants in the country; furthermore, with which manpower could be pushed up the manufacture, giving that the unemployment is a the historical lower level?).
Trump, with his superficial culture believe to be a new President Monroe (another myth for him like McKinley) and want to dust off the 200-year-old doctrine – that the US shall not tolerate foreign powers that interfere in the US sphere of interest – is defied by Chinese penetration in the Western Hemisphere (look on the insistence about the ownership about the Panama Canal and by potential incursions from the Arctic, with the threat on Greenland; but Copenhagen seems to have a preferred love trip for Washington; the Danish government repeatedly attempted to sell the islands become expansive and unproductive, which were purchased by President Woodrow Wilson in 1917, three years after the inauguration of Panama Canal, for $25 million in gold).
And the only peer competitor the US faces, China, has growing influence in Africa and the Middle East, where it is rapidly becoming a significant trading partner, even if with serious gaps (the concept of a fair and not predatory partner everyday shows his weakness). By one estimate, China’s lag in AI is only months behind the US technology level.
Meanwhile, from Trump’s point of view, the US is stuck down by the Ukraine war, which (like Obama before him) he does not consider a vital US interest.
The Middle East is balanced on a fine edge. The longer that war continues, the more it threatens to spread, the less secure are the regimes that are US allies.
Taken together, this is an entangled set of problems that are difficult to tackle gradually, in sequence. Perhaps only a Trump would decide there is a better chance of resolution by shaking the entire box. It is a dangerous gamble, reflecting the US deep culture of ‘brinkmanship’ but has its logic.
Domestically, he is hoping to mitigate the medium-term harmful impact of his own tariffs by combining them with budget cuts (Elon Musk’s DOGE and consequent staffing reduction and replacement with AI-based information systems) and deregulation, in the hope of accelerating growth.
The reason why the US was negotiating with Russia in Saudi Arabia is, evidently, to be able to have the Saudis at hand without drawing curiosity about their presence. The US and Russia must be discussing Iran (about which the Saudis must be on board) as well as Ukraine.
A deal that includes Iran could be considered an advantage for the US even if it’s grossly disastrous to Ukraine. The reason why Trump is so ready to deal with Putin is precisely because he convinced that Putin is a weak rival and want Russia and Iran out of the scene, while he can focus on China, the only real target.
Trump’s understanding of Putin might turn out to be a costly mistake. In any case, he leaves it on the Europe’s shoulders, reflecting his poor thinking (helped by the persistent contempt toward Europe, present in large part of the American society).
The same goes for Trump’s belligerence over Panama and Greenland. The US interest in Greenland, driven by the Monroe doctrine, goes back to 1867. What is new is the readiness of the US to speak about an ally with open disdain and treat Denmark (and Panama) as though it’s a vassal state.
The attitude, including the vulgar narrative (it should be remembered that the US Ambassadors in Great Britain during XIX Century were labelled by the, even if arrogant, British diplomats, as ‘ill mannered’) is not new; the public tone is, and for some public opinion, especially European, a cultural chock, after the sophisticated wording of Clinton, Obama and Biden. The readiness to drop the mask in public is, partly, an attempt to gain the advantage in negotiations. But it’s also a classic case of aggressive display driven by a deep-seated sense of defensive weakness.
Europe should not accept having one of its own treated like a vassal. But dealing with a rational president is not like dealing with a mad one. And Trump is not mad; he’s a nationalist who’s scared and uncertain about the future.
Russia and China have been best partners for decades, after years of stiff confrontation, which bring them on the edge of an open war in the late ‘60s (remember the huge battles around the Ussuri River in Manchuria).
The two countries have been each other’s most important diplomatic partner since the beginning of this century. Throughout this period, Russia has been central to China’s project in building of an alternative world order.
During the leaderships of Hu Jintao (2002–2012) and Xi Jinping (2012–present) emerged the dominance of Sino-Russian exchanges.
This decades-old habit of intense interactions remained stable after Russia’s full-scale invasion of Ukraine in February 2022. Beijing and Moscow’s similarly bleak view of the international order cannot be undone by a few trips of some eager European ministers to China or a few ill-thought-out US concessions to Russia.
The intimate nature of XI-Putin ties is clear. There has been a state visit in one direction or the other every year since 1999. Since Russian President Vladimir Putin took office in 2000, a Russian president went on a state visit to China every even year, and every uneven year a Chinese president went to Russia. The exceptions are Xi’s extra visit to Moscow in 2015, officially called mere ‘attendance’, for the WWII victory parade on 9 May (there were no visits either way during the Covid-19 pandemic). More, symbolically, Both Hu and Xi made their first foreign visit as just elected presidents to Moscow.
There is no other country that has a diplomatic relationship with China like this. Russia is the top outgoing destination during Hu Jintao’s and Xi Jinping’s presidential terms. Russia was the top source of incoming visits for Hu’s two terms; it ranked second or third for Xi’s first two terms and, so far, for his third term, too. Few foreign officials have led delegations to China as often as Putin and Russian FM Sergei Lavrov.
Russia has been China’s most important diplomatic partner throughout the governments of Hu and Xi. Observers are right to point to the personal relationship Xi and Putin have developed—one that includes birthday phone calls. However, the empirical data shows that interaction was equally intense when Dmitry Medvedev was president of Russia and under the supposedly less assertively nationalist Hu.
Beyond diplomatic visits, Russia is fundamental to Beijing’s alternative world order. It has always been an important member of international groupings that Beijing began constructing from the 1990s onwards, including the Conference on Interaction and Confidence-Building Measures in Asia and the Shanghai Cooperation Organization (SCO) and BRICS (and BRICS+).
China’s views on international order have developed a more global perspective over the years. Starting with the East Asia Summit and the Asia-Pacific Economic Cooperation nearer to home, China now reaches the entire developing world through groupings such as BRICS+. Russia was always there—often to back up Beijing’s camp.
China’s long-term solution for what it still persistently calls ‘the Ukraine crisis’ overlaps with elements of Russia’s view of regional order. Within days of 24 February 2022, Chinese FM Wang Yi presented a ‘Five-Point Position’ that called for the formation of a “balanced, effective and sustainable European security mechanism.”
The Chinese top diplomat linked the conflict’s ‘complex historical context’ to the ‘principle of indivisible security’. This Cold War-era idea evolved into a phrase first used by the USSR and now by Russia to claim that NATO expansion infringes on its sovereignty and represent a security threat. Chinese officials, too, have since 2022 repeatedly described US Indo-Pacific policy as a ‘NATO of the Asia-Pacific’ that risks triggering the same ‘disaster’ as NATO supposedly originated in Europe.
At his press conference following the parliament meeting in Beijing, Wang said no third party could influence the friendly ties between China and Russia. The data backs him up. The relationship has been at the core of Chinese efforts to strike out in the world.
Despite massive historical differences between the Sino-Soviet split and today (and the mutual, but hidden, racial contempt), the data shows that the practical situation on the ground is durable and sustainable. China’s diplomatic ties with Russia have not quantitatively increased or decreased significantly since February 2022. In contrast, my data shows that after 2014 diplomatic interactions between China and Ukraine declined.
Xi—who has called Ukrainian President Volodymyr Zelensky only once—told Putin during his most recent state visit in 2023 that Russia and China were driving “changes unseen in a hundred years,” which he links to his Chinese Dream.
In Xi and Putin’s world, there may be room for Donald Trump. But there is no place for the rules-based international order that many countries depend on. Western capitals and Washington pundits need to realise this is not a whim; Russia has consistently been China’s most important diplomatic partner.
Therefore, the US project to detach Moscow from Beijing remains weak and based on wrong assumptions and perspectives. Kissinger’s diplomatic offensive came after years of harsh political, economic, ideological (and military) clashes, with an initial rift that began with Khrushchev’s leadership and China needed economic support after the disasters of Maoist management and therefore found an open door. Russia is already clearly aware of being Beijing’s junior partner and if it must remain in that minority condition, it prefer the certainty represented by China and much less being Washington’s junior partner with the uncertainty of being suddenly abandoned in the face of a vengeful China due to a sudden and ill-conceived change of strategy by Washington.
As the Beijing-Washington tariff war enters yet another phase of escalation, with Trump proposing new hikes that push the effective U.S. tariff burden on Chinese goods to a staggering 145 percent and Beijing responding by raising its tariffs on U.S. goods to 125 percent, suspending the purchase of Boeing commercial airliner, Chinese policymakers have shed any lingering illusions of an imminent thaw. They may center on retaliatory tariffs and trade problems and with the clear perception that this situation is not a momentum, but it will be, at least, a mid-term one.
Further, other than adopting a (moderate, for now, giving that the tariffs are still lower than the US ones) tit-for-tat approach, China is moving cautiously but firmly to manage reduce the damages and reposition itself globally. This emerging strategy is organized into several layers of action. At the center of it there is the need to stabilize the national economy and try to overcome conjunctural and structural problems which affect the country. Together with a surgical pressure against the US. The last element of the Beijing strategy is the global approach focused to counter the diplomatic isolation, present and future, well aware that the US administration aims to isolate Beijing using tariff negotiations, demanding stiff economic and technological restrictions from allies.
As said, the domestic situation remains the most relevant priority with the first signs in pushing the internal demand, depressed for years in order to promote the export of whatever product. The new situation will put an end to the intermittent pushing consumers-oriented policies, partially originated by the bad management of COVID pandemic.
How these policies could be implemented? Direct subsidies for vulnerable households, accelerated distribution of consumption vouchers, property market stabilization incentives, tax credits, and both fiscal and monetary support are being prepared for rapid deployment. Local governments have been directed to prioritize household support. Mortgage restrictions will be relaxed in dozens of cities with the aim to solve the real estate crisis. Subsidies and tax credits will be expanded for childcare, education, and eldercare. Aside to it, the Beijing would work intensively in order to fill the gap between coastal areas and inner and peripherical ones, also in order to push up the infrastructures gap (high speed trains, highways, airports, clean power stations and networks) with a look on the social tranquility.
The reduction unemployment, especially in the youth people is another tool in order to promote the domestic consumption, with a special regard with services, less exposed to trade disruptions and more capable of absorbing labor. Another way would be attracting more foreign tourism, with more relaxed visa policies, improved digital payment infrastructure, and curated campaigns targeting high-spending travelers.
Fiscal and monetary tools will used as pivotal element: the central bank has lowered the medium-term lending facility rate and expanded credit access for small and medium enterprises. On the fiscal side, Beijing has front-loaded deficit spending and could ramp it up further, depending on the fallout from the trade war and further resources could be obtained in case of crisis of extreme gravity with Washington, selling the enormous quantity of US bonds.
Chinese shifting to enlarging the domestic market face huge challenge: income inequalities (not only between coast and inner area, but also in the urban settlements; increase cost on social welfare, education, health and the most important, a financial architecture which privilege the control than buyer’s growth). The Chinese leadership is aware that these are structural and deep problems, which require, in order to be attenuated firstly and overcome after, are-consideration of many aspect of the communist dominated society and this is an heavy risk for a country of on one billion and half of people.
Some analysts believe that this would be a transformation of economic policymaking – from long-term aspiration to immediate necessity, in reality is a mere mid-term curtain, awaiting to retake the (smiling) aggressive policies which characterized the action of Beijing.
Complementing these policy efforts is a tightly coordinated narrative campaign. Xi Jinping has emphasized economic self-reliance and “national resilience.” The communist directed state media has revived the Maoist narrative of the foreign enemies stressing their eternal campaign against the Chinese people and its struggle for a dignified and just role in the present world.
The second level of the Chinese approach is the relationship with the US. After the further raising of tariffs against US goods to 125 percent, Beijing signalled that additional moves from Washington would be “ignored” – not because they’re inconsequential, but because, with the current tariff levels, US products are already out of the Chinese market (this is the real reason why, beyond that point, tit-for-tat retaliation loses its strategic value).
Unsurprisingly, China has resorted to more surgical retaliation. Though not new, these targeted strikes are now being deployed with a speed and scale that exceed previous rounds of retaliation. The powerful Chinese customs increased the scrutiny of the import from US and regulatory authorities imposing everyday new blocking rules.
Even if these measures were not pumped on the media, Beijing send a heavy signal to the U.S. business community: access to China’s market can be modulated – and will be (and the underground message is, if you want to continue to export in Chine, press Trup to change line).
But where these measures bit are the critical minerals export to US (and allied). Even not complete, the limit to the export shows the potentialities of the retaliation of China and the disruptive consequences for the economies of many countries, and as consequences the choice that those countries may adopt facing the threat of Washington to choose a camp.
Rising the cost of escalation and keep the door open for a dialogue is a persistent aspect of Chinese policies but Beijing prefers bottom-up diplomacy that pave the way before high level meetings. Historically Beijing is unwilling to take risks, and an high-profile meeting without clear guarantees risks political reputation damage, and this something that China want to avoid at all costs. Beijing sees Trump’s approach – where world leaders are expected to come in line to him to plead for resolution, exemptions – as incompatible with Xi’s grand strategy to project strength around the globe.
Trump’s approach to diplomacy – driven by egocentrism, vulgar rants, mood and on-spot declarations, convinced China any deal would be not durable or stable. Giving that Beijing, drink the bitter taste, but prepare for a different drink and not why China is more oriented to the confrontation, but because there are credible alternatives. But Beijing is working to expand its margins – politically and economically – by doubling down on regional diplomacy and offering itself as a more predictable, if not always less complex, partner.
The recent Central Chinese Communist Party Conference on neighborhood diplomacy (the first of its kind since 2013) – represented an important shift in the attempt to consolidating ties with regional neighbors as a buffer against great-power pressure. In his keynote, Xi described China’s relationships with its neighbors as “at a critical phase,” calling for “new breakthroughs” in cooperation. That message now undergirds Xi’s visits this week to Vietnam, Malaysia, and Cambodia – countries where Beijing is positioning itself as both a partner and a counterweight to U.S. influence (and are countries which China had a long and controversial history, just to remember the Maoist insurgencies in Malaysia between 1948 to 1990, the war with Vietnam in the 1984, and recent tensions for the control of the islands of South China Sea).
The same mixed feelings are present in the whole Southeast Asia, where China’s economic weight is imponent as well the concern which originated by the politico-military push (led by the brutal intromissions in the small archipelagos of the South Pacific). In a broader perspective, no country in the region wants to confront Beijing, including India, which has the potentialities to face it. If Beijing looks for a leading position (in the microregion of IndoPacific and elsewhere) must persuade as first step and not flexing muscles. Australia, Japan, South Korea, and the Philippines have all faced Beijing’s tough stance when taking political position stances that does not match with Chinese agenda and priorities.
Globally, China aspires to position itself as the pivot of the new globalization – a lofty ambition. Yet it enters these conversations burdened by a history of sharp-edged diplomacy.
Being stuck between two major weights, many countries (blocks, like Europe that show once more fragmentation and weakness) would prefers to not be obliged to choose camp and his apparent foolish stance opened windows of opportunities for China, but many caveats, especially in fair trade, ethical and political aspects, especially for many EU countries. Beijing must offer much more than infrastructure projects or market access. It must demonstrate that it can be a stable, fair-minded partner, even in disagreement. That means more listening, greater predictability, and genuinely mutually beneficial arrangements.
Europe fragmented stance shows how much it could complex a re-set of the relations with Beijing. EU Commission (and UK) remain dubious about China’s performances and rules: industrial policies, state subsidies, forced technology transfers, overcapacity, lack of transparency and independence of private companies, labour rights, environmental policies.
Beijing is aware of the need to update legal and ruling architecture, but here fall again the perplexities for a too much deep reform that may put at risk the control of the Communist party, not only over the consumers, but to the entire economic apparatus of the country.
Whether this approach will prove sustainable remains uncertain. Headwinds abound: economic slowdown, wary foreign investors, and unresolved tensions with neighboring countries. But as of now, Beijing has adopted with the consideration that the trade war is not an accident of world history, but a new element of the present time and as such it must be managed accordingly.
