China's Lessons for Mexico on Trump: Dig In and Keep It Personal

As Mexico faces up to the prospect of a protracted trade struggle with President Donald Trump, China has lessons to offer its fellow Group of 20 member. For the last two-and-a-half years, Beijing has witnessed multiple false dawns in its trade standoff with the U.S., enduring a roller-coaster ride of grand announcements, presidential tweets, stalled talks and mutual recriminations. After negotiations fell apart last month, Trump hiked tariffs on $200 billion of Chinese goods to 25% from 10% and stepped up moves to kneecap Chinese companies like Huawei Technologies Co. Now Mexico finds itself in a similar situation. Shortly after talks with the U.S. were concluded on the replacement for NAFTA, Trump announced a 5% tariff on goods from Mexico starting June 10 unless “decisive measures” were taken to halt illegal migration. The president, who on Thursday urged Mexico to “step up,” is holding out the threat of raising the tariffs to 25% by October. The two countries continued discussions into the night Thursday in Washington but no cabinet-level U.S. officials were involved in the meetings. With China and Mexico both facing mounting economic damage, the first lesson, according to Jorge Guajardo, Mexico’s former ambassador in Beijing, is that Trump sees tariffs as the source of his leverage. That means persuading him to remove them will be hard. “Once he puts the tariffs on, they are there to stay,” Guajardo said. “The idea that he’ll ever lift them is a mirage.” The U.S.’s refusal to immediately remove tariffs was a key sticking point for the Chinese before negotiations broke down. Another key takeaway, according to the Chinese side, is that working-level talks will only take you so far. One Chinese trade official said discussions with the U.S. had reached a point where no further progress could be made without the intervention of the two presidents. “Liu He kept coming to Washington and talking as if it was going to lead somewhere,” said Guajardo of President Xi Jinping’s trade czar. “It was never going to lead anywhere.”...MORE