China claims victory over trade wars, but that’s a delusion
- Tom Pauken II.
- May 14
- 4 min read
In the Charles Dickens novel, David Copperfield, the British author depicts a character named, Mr. Wilkins Micawber, who constantly struggles under huge debts due to careless mishandling of money, but he remains fervent with false hopes that some day he will reap a financial windfall for his family.
Dickens described a person who creates “castles in the air.” He’s explaining how many people could fall prey to fantasy thinking in which they imagine that some day they will live in a castle, when in fact they are unlikely to rise above their lower to middle class status.
Apparently, many Chinese are also embracing “castles in the air,” by believing that Beijing has already trounced United States President Donald J. Trump in trade wars, while assuming that China will soon emerge as the most powerful and richest nation in our world in the very near future.
Additionally, US and China trade officials in Geneva, Switzerland only agreed last week for Washington to lower tariffs on Chinese imports at 30 percent baseline for 90 days and Beijing agreeing to drop tariffs on US imports at 10 percent, while China will lift its exports controls on rare earths processed in the country.
Yes indeed, the announcement sounds amazing and game-changing, but let’s not forget that the tariff rates are not permanent and subject to change after 90 days, starting from May 14.
Nevertheless, many Chinese think they have won a glorious victory over President Trump and are failing to heed warnings that if China fails to mend its unfair trade practices and refuses to comply with the US-China Phase One Agreement, they will confront disastrous consequences from that.
In reality, China is proving yet again that they could snatch defeat from the jaws of victory by chasing after “castles in the air.” As of 8:00 am (Beijing-time), Thursday May 15, 2025, the Chinese government has made no official announcement it will comply with the Phase One Agreement.
We have also not heard any news about Chinese state-owned enterprises (SOEs) placing bids to order more Boeings, oil & gas deliveries or agricultural products from the United States.
Rumors are swirling that Beijing has delivered instructions to China’s SOEs that they can’t make business deals with US-based traders and companies for the time being, saying, “The direction of China-US relations is uncertain, so state-owned enterprises will not make purchases now,” according to a confidential source working with a Shenzhen-based energy importer.
The news comes across like a shot across the bow and how come China would take such a bold position after scoring a temporary reprieve on Trump’s sky-high tariffs? Well, I have lived and worked in China since October 2010 and have gotten more accustomed to understanding its culture, the good, bad and ugly.
It’s true that many Chinese are hard working, support a law & order society and take to heart social harmony concepts, but they still have deep character flaws that could lead to their own undoing. Many Chinese insist that they are humble, but inside their hearts could be an arrogant mindset that’s getting much harder to hide.
Recent conflicts in US-China trade wars have unmasked the true spirit of the Chinese as a citizenry that’s prone to shameless boasting, bluffing to extremes and failing to learn lessons from prior mistakes.
They have gotten exposed as short-sighted, emotional thinkers and clutching onto ‘visions of grandeur,’ which have blinded them from acting more logical, pragmatic, solutions-driven and consensus-oriented.
Accordingly, they could be doomed to lose big-time in US-China trade wars, unless they get back on track to comply with the US-China Phase One Agreement, by start to make orders for US purchases and takes steps to prove China seeks better relations with the Trump administration.
And what about that phone call? Has Chinese President Xi Jinping made a schedule to call President Trump in the near future or was the Chinese government thinking they could play Trump for a sucker yet again by bailing out on that call too?
Now is the moment of truth for China. Are they serious about restoring more prosperous cross-border trade and investment ties with the USA or will they just toot their own horn claiming a trade wars victory while doing nothing to resolve prevailing disputes with Washington?
The gambling curse has inflicted deep pain on many Chinese. I’ve witnessed how this vice has destroyed many families in the country. One of the leading causes of suicides among young adult males in China is connected to gambling. The person ran up massive debts and felt too ashamed to ask family and friends for help over ‘loss of face.’
The gambling demon runs deep in many Chinese and that makes them susceptible to taking high risk behaviors, while acting in a sneaky manner, trying to hide their debts and character weaknesses to outsiders.
The addicted gambler keeps making bets, whether in good times or bad. When they are losing badly, they make bets hoping to regain their losses; but when winning they only think “double down.” They can’t walk away from a win but must make another bet hoping that they can score an even bigger victory.
That’s why the gambling addict can’t overcome their burdens unless they quit gambling. They have to re-wire their character and brains.
And in the same vein, the Chinese government sees the 90-day pause as the golden opportunity to roll the dice on a “double down” bet. They cast their fortunes to the wind by mocking President Trump as a loser while staying stubborn against ‘Phase One Agreement’ compliance.
How long will Beijing play this foolish card? We don’t know, but if they think this is a winning hand, they are sorely mistaken. The Chinese will likely learn bitter lessons 90 days later when President Trump proves that he’s not a bluffer and will return to impose sky-high tariffs on Chinese imports for another round.
(Tom Pauken II., author of US vs. China: From Trade Wars to Reciprocal Deal, AFAI Senior Fellow, Geopolitical Consultant based in Beijing, China)
X: @tmcgregochina
Footnotes
Amazon, “David Copperfield,”
Amazon, “The Gambler,”
The Fence Post, “Bessent: China needs to fulfill Phase One purchase agreements,”
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