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BusinessQuiet 5d · day 6

Posen: Trump should buy time with China on trade, not escalate tariffs

Foreign Affairs economist argues the U.S. lacks leverage in a trade war and should pursue imports and investment instead.

newest coverage 4d agosummary written 4d ago5 pieces NewswiresReddit

What to know

  • China controls 80–90% of rare-earth element production, giving Beijing escalation dominance in trade disputes that the U.S. cannot quickly overcome.
  • The Trump administration's October 2025 tariff strategy backfired; the U.S. has repeatedly made concessions on tariffs, technology, and visa policies to access Chinese inputs.
  • Posen argues the U.S. should pursue economic diplomacy—increased imports of strategic goods and Chinese investment—rather than zero-sum confrontation that neither side wants.
  • The upcoming Trump-Xi summit offers an opportunity to buy time while the U.S. works with allies to diversify supply chains and reduce Chinese dependence.

“China has escalation dominance over the United States, meaning that at any level of threat, the Chinese government has the ability to inflict more pain on the United States than vice versa.”

Adam S. Posen, Peterson Institute president · Foreign Affairs ↗

Adam S. Posen Peterson Institute president, analystDonald TrumpDonald Trump U.S. PresidentXi JinpingXi Jinping Chinese leaderScott BessentScott Bessent U.S. Treasury Secretary

How it unfolded 2 developments, newest first · click a bar or a number to jump articlespostscomments

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Sep 21Sep 22Sep 23Sep 24yesterdaynow · 12:55 PM ET
  1. 2

    Posen recommends economic diplomacy over zero-sum confrontation

    Posen proposes the U.S. pivot strategy: pursue increased imports of key strategic goods and Chinese foreign direct investment rather than tariff escalation. He argues economic relationships need not be zero-sum, that both nations benefit from trade and diversification, and that Beijing, comfortable with the status quo, has little interest in escalation that would harm its own economy.

    “The U.S.-Chinese economic relationship does not have to be played as a zero-sum game. The benefits from trade and diversification for both economies remain substantial.”
    — Adam S. Posen
    1. 1 outlet China Still Has What America Needs

      first by Foreign Affairs, 5d ago

    • Through the inflation reduction act, subsidies for EVs could have been limited to EVs with magnets sourced from friendly nations or partner nations and that would have spurred magnet production and rare earth refining either on US soil or allied nations.

      Ok-Pea3414r/geopolitics4d agoview on r/geopolitics ↗
  2. 1

    Posen argues tariff strategy backfired; China has escalation dominance

    Adam S. Posen publishes analysis in Foreign Affairs contending the administration's confidence was misplaced. He argues China controls 80–90 percent of rare-earth element production and has repeatedly forced U.S. concessions on tariffs, technology controls, and visa policies. The U.S. cannot quickly decouple from Chinese inputs, giving Beijing escalation dominance.

    “What do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us, so that is a losing hand for them.”
    — Scott Bessent, U.S. Treasury Secretary · source
  3. background

    Trump administration pursues tariff leverage at Xi summit, claims advantage — The Trump administration approaches its October 2025 summit with Chinese leader Xi Jinping projecting confidence in its negotiating position as the trade deficit country. Treasury Secretary Scott Bessent asserts the U.S. holds leverage, stating China would be hurt more by tariff escalation.