What Goes Around Comes Around and Other Cliches

Those of you unlucky enough to be bored by one of my speeches know that I frequently point out that there is no World Trade Organization rule against hypocrisy. In fact, it appears there is no rule anywhere against hypocrisy, and certainly not in the Trump administration. Conveniently, proof of my hypothesis has recently emerged.

For the past week we have been treated to cries of outrage from both political parties over China’s imposition of stricter export controls on rare earths and port fees for U.S.-built or -owned ships. This has been deemed a hostile act, and Trump has responded by threatening an additional 100 percent tariff on Chinese goods effective November 1. That date comes immediately after the potential Trump–Xi Jinping summit meeting in South Korea at the end of October. The obvious conclusion is that both sides are playing a leverage game in the run-up to the meeting, and attacking each other’s good faith is as much a part of that as the actual substance of what the two governments are doing to each other. The Trump administration appears to have been surprised by China’s action, which itself is a surprise because China always retaliates. This should have been expected. The charitable explanation was that the two sides interpreted the most recent ceasefire agreement differently, with China believing it was a commitment not to take any additional actions, and the United States seeing it as a simple export controls for magnets deal that did not prevent other steps.

But this column is not about the tactics or wisdom of either side. Instead, it is about the failure of anybody on the U.S. side to acknowledge that China is doing pretty much the same thing the United States just did to them. A few weeks earlier, the Department of Commerce’s Bureau of Industry and Security imposed stricter export controls on U.S. chips and semiconductor manufacturing equipment, and on October 14, previously announced fees on Chinese-flagged or -built ships landing at U.S. ports went into effect.

China’s response was directed at rare earths rather than chips, which is its point of leverage against the United States (and the rest of the world), but in imposing stricter controls, China also adopted its own version of the U.S. foreign direct product rule (FDPR) by claiming Chinese jurisdiction over products that contained even a tiny amount of their rare earths. Sound familiar? The U.S. FDPR takes a similar approach in claiming U.S. jurisdiction over products manufactured with U.S. equipment or based on U.S. designs, even if there is no other U.S. content.

The Trump administration reacted with high dudgeon. It appears that turnabout is not fair play. Secretary of the Treasury Scott Bessent stated

He also suggested that the Chinese official responsible for the decisions was “unhinged.” In an unusual reversal of roles, Trump was kinder, saying that the official must have been having a bad day.

U.S. Trade Representative Jameison Greer called the new controls “a global supply chain power grab,” ignoring the fact that U.S. chip controls are a similar power grab, at least with respect to China, and that the United States is getting a taste of its own medicine.

To compound the irony, Secretary Bessent also said, “When we have the discussion, they say, ‘Take off the tariff and then we can fix it.’ We say, ‘Fix it and show us six months of persistence and then we will take off the tariff.’” Those of you who are following the government shutdown will note the same argument but with the positions reversed. The Democrats are demanding a healthcare solution in advance of reopening the government, while the Republicans argue for reopening and then addressing the problem. Apparently, what is sauce for the goose is not sauce for the gander.

This tit-for-tat exchange may seem like small cheese (though it is not for those who will have to pay the fees or will not be able to export their products)—a normal part of the leverage game—and the players may be aware of their hypocrisy, though there is no evidence of it. Even so, I’m depressed at the lack of honesty in the dialogue. Both sides should acknowledge the truth of the matter rather than continuing the pretense of outrage.

Hypocrisy shows up frequently in public discourse, and I suppose there is a place for it, but in this case, it is not serving either government or their people well. Arguing that the problem is entirely the other person’s fault when both are guilty is not the path to a solution.

William A. Reinsch is senior adviser and Scholl Chair emeritus with the Economics Program and Scholl Chair at the Center for Strategic and International Studies in Washington, D.C.