Global Reciprocal Tariffs, Xi Jinping’s PLA Purges, and China’s Military Aggression Against Taiwan
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Welcome to China Insider, a podcast from the Hudson Institute's China Center. I'm Miles Yu, Senior Fellow and Director of the China Center. Join me each week for our analysis of the major events concerning China, China threat, and their implications to the U.S. and beyond. ♪

It's Tuesday, April 8th, and we have three topics this week. First, we track the latest updates regarding global reciprocal tariffs and China's response to U.S. trade policy. Second, we look to unpack Xi Jinping's latest purge from the People's Liberation Army and China's Central Military Commission. And lastly, we discuss the PLA's two-day military exercise around Taiwan last week and what this means for the evolving dynamic and cross-strait relations. Myles, how are you doing today? Very good, Colin.

So we start things off this week with a familiar topic from the last few weeks on the show and revisit the latest round of global reciprocal tariffs. Last Wednesday, President Trump announced an additional 34% tariff on all Chinese goods imported into the U.S., in addition to a slate of tariffs against almost every other foreign country and territory. No less than 48 hours later, China responded with their own tariffs matching the U.S.'s 34% on all U.S. imports starting from April 10th.

Miles, what should we know about this latest round of reciprocal tariffs and where exactly does China factor into the equation? Very good question. Obviously, this is the story of the 21st century so far because it is changing the global free trading system. Everybody's talking about it. Some people are happy, most of them are not happy because U.S. is imposing tariffs on every

the country involving in trade with the United States. So this trade act, this new policy, reciprocal tariffs were actually a brainchild of two people, two individuals. One is obviously the president himself, President Donald Trump.

40 years ago, start talking about how United States to be unfairly treated by friends and allies, or together and foes as well. In terms of global trade, he talked about, of course, in the 80s, it was about Japan, and then the Europeans and, literally, China. So that is basically the overall mentality of President Trump for, as I said, decades. Now, specifically on China,

It's another person, which is his top trade advisor. That is Professor Peter Navarro of UC Irvine. He was the trade czar for President Trump the first term. Right now, he's a special advisor on trade for President Trump the second term. He played a very crucial role. Peter wrote a book in 2011.

the title of the book should tell all death by china confronting the dragon a global call to action now think about this the title of the book which appeared made it into a tv series a highly highly uh uh popular tv series it's called death by china that is china is exporting the

international free trade system and is basically killing America in terms of economic, in terms of trade. And that's the title, Death by China. And confronting the dragon means the methodology we got to punch back. So this is basically the second part of that thinking. And of course, third part of this embodied in his title is called a global call to action. In other words, Peter Navarro realized

Dealing with China is not just about a singular selective targeting approach. It has to be global because China is integrated into the global free trade system. So that's why the whole title of that book in 2011 is called Death by China, Confronting the Dragon, A Global Call to Action.

So you combine this thought by two individuals, President Donald Trump and Peter Navarro, you got global reciprocal tariffs. So that's where we have it. China is the center, is at the center of this global reciprocal tariffs because it reflects a failure of selective targeting on economic and trade policy specific to China.

tariffs are the last resort in a free trade system. The global free trade system was completely sabotaged by China being a full member of it. So that's why this is all about China. Of course, there's also the overall unfair trading system, that is the American tariff is historically much, much lower than

everybody else and coming to the United States. So all trading condition, trading terms on zero tariff

a ground is very, very rare, extremely rare. You can cut it with your 10 fingers. So overall, everybody should be charged by a 10% base tariff. And then on China, of course, China is a country with which the United States holds the largest trade deficit.

So that's why it's 34% tariff. That really is important. Everywhere else is just as a part of the China-centric trade policy because China has been using the global free trading system to use in third countries to dump its goods to America. That's why everybody involved is a target, particularly those countries who are used by China as what we call white gloves

And that's why they're targeted the most severely.

Vietnam, Cambodia, you know, all the countries were used by China as a conduit to dump Chinese goods into America. Those were the ones that target the most severely. In its own announcement of 34% reciprocal tariffs, China's State Council Tariff Commission issued a statement saying this practice of the U.S. is not in line with international trade rules, seriously undermines China's legitimate rights and interests, and is a typical unilateral bullying practice, end quote.

The Trump administration has repeatedly stated these tariffs are to address the current trade deficit and imbalances, like you just mentioned, Miles, as well as for national security reasons to stem the flow of illicit substances into the U.S., among other concerns. Miles, what exactly are the existing World Trade Organization rules that might govern these trade policies? And what can we expect from future reciprocal tariffs with China moving forward from here? WTO.

to which China was admitted in 2001 is a total hollowed shell. It's been completely sabotaged by the Chinese government. And let me explain why. In 2001, when China was accepted into WTO, China promised 45 key changes to be compliant with the international trading system.

Of the 45, China fulfilled not even half of it. And almost the most critical part of those 45 promises were unfulfilled. For example, among those unfulfilled by China is lowered the tariff to almost zero.

number one number two get rid of any connection between chinese currency the yuan and the chinese government in other words there is no currency manipulation number three to treat the state-owned enterprises and the non-state enterprises totally equally this is a total joke in china so um and of course you also have all other kind of uh open the market open the market

completely abolished tariff barriers. And that basically is not happening. So in other words, China has never fulfilled the key promise to WTO as it promised in 2001. So if you strictly interpret the WTO condition by now, 25 some years later, China is not even qualified to be

a member of the wto but it's too late because china pretty much control the functioning body of the wto of the uh key bodies in the wto institutions particularly dispute settlement bodies normally any dispute would involve something like three judges but right now since 2019 all the major uh

institutions that involves dispute straight dispute there's only one judge that judge is always the chinese one so there's no way u.s could win and of course china is a membership in the wto right now is still as a developing country

This is a total joke. China is the world's second largest economy. It has several trillion dollars in currency reserve. It has enough money to basically bribe half of the countries in the world. So yet China is given a developing country status in WTO. That means China now has longer timelines to comply with trade rules, and it has the ability to offer more state subsidies legally.

under the WTO framework. And China has a looser transparency and notification requirements if you're a developing country. So this is basically not totally not fair. And China also has made its industrial subsidies and support for state-owned enterprise, SOEs, a core part of its economic model. So WTO rules are often very weak

or even outdated to address the SEO issues. That would include hidden or indirect subsidies, non-transparent lending by state banks, and favoritism in procurement or licensing. So this is basically is not right. And WTO is particularly weak on intellectual property enforcement.

So China can get away with forced technology transfer as a condition for market access. China can also get away under WTO framework, the IP theft by firms or through state-sponsored cyber activities. So it's like that. WTO cannot do anything about that.

And as I say, the weaponization of dispute settlement system in WTO was also China's expertise. Every time you have this challenge in the WTO framework against Chinese dumping,

China always win because China controls the court, basically. And also it has the ability to block WTO reform efforts that might restrict the subsidies or transparency loopholes. So, I mean, it's really a joke in my view.

WTO, many countries including United States, try to change for the better on transparency rules, new disciplines on subsidies, e-commerce or data governance, none of it has been successful. So, and as a result, what you have here is under the WTO framework, China could leverage WTO rules and China's own massive industrial policy and to capture key segments.

of global supply chains, such as rare earth, EV batteries, solar panels, and it has created a dependency, a global dependency that makes it hard for countries to retaliate without self-harm. So, I mean, I use the word sabotage,

very carefully. And other people said, you know, China particularly say, oh, this is just a strategy. It's not a sabotage. Nevertheless, the aim is the same. That is, the result is the same as well. China is gaming the system, hollowing out industries and refuse to play fair. And that's why you have this global reciprocal tariffs. It's not the ideal measure, not the ideal approach, but it has to be done.

So let me follow up there then and ask, given that kind of a takeover of the established international trade system and certainly China's role in supplanting it over the past 10 to 15 years, what exactly can the rest of the world do in response to these coercion tactics? And what is unique really about China's response to the ongoing tariffs that the US has levied to kind of tackle this issue?

United States being the largest economy in the free trading system is the primary victim of China's strategy or sabotage efforts in the global system. But not alone. Virtually every country in the free trading system has fallen victim to China's practice. European Union is protected because it has its own trading bloc, of which China is not a member. It's the European Union's trading bloc.

the rest of the world is forming their own trading block to basically get away from WTO framework.

where china has dominance the biggest one of course is a cpttp that is the one that mostly by asia pacific country i mean including you at uk for example also that is one that specifically set up to exclude china's membership which is probably right thing to do but it's not a global in nature so that's why that's why you know every country is taking their own

uh measure to sort of you know to make sure that the fair trade is carried out but again china has the capability to bribe to threaten uh the world that's why um i think you know um it's a long haul the reciprocal tariff system uh the policy announced by trump administration is just a wake-up call so it's not really the the objective itself it's a way to force people to negotiate

a much more fair and much more sustainable trading system. I think, you know, a lot of countries have responded to the reciprocal.

tariff policies and dozens of scores of countries have indicated that they're going to basically talk to the Trump administration to negotiate on a fair term basis. - So given that, Miles, how does the world respond and how is China's response to this scenario principally unique?

Of course, overall, the global response to the reciprocal tariffs were basically anger, disbelief. But mostly, no one has challenged the main argument of the Trump administration's call for this reciprocal tariff. That is, America has been treated unfairly in terms of tariffs because it's not reciprocal.

So, and most countries are willing to negotiate and admit this is the case. For example, the United Kingdom, EU and Vietnam and Singapore

they all want to negotiate with the United States and to start with the call for zero tariffs, mutually zero tariffs. And India indicated the same thing. Taiwan's president, Lai Ching-tung, went on TV two days ago saying, yes,

Taiwan would like to negotiate with the United States on the basis of zero tariffs starting from that. So Israeli government is the first country in the world to announce that they're going to get rid of all the tariffs against the US imports. So those were basically the major response. And I think countries like Canada, where there was the election coming up, so they have to act tough.

so that somebody can get elected but in the end they have no choice but to negotiate with the united states because the canadian government economy is totally dependent on the united states so in the

overall i think after the initial wave of shock and all and then a lot of countries would have to come to the united states that's basically what's going on right now i think the right house chief of staff going on went on tv over the weekend saying that over 50 countries have already indicated to negotiate with the united states negotiation that's true that's the way china responds very unique china basically has never admitted it's wrong china has never admitted is willing to

to make any compromise. So China announced 34 tariffs on all American imports in retaliation. So the word retaliation is very unique in Chinese case. They have to do that because China's entire Chinese Communist Party, entire legitimacy to rule

It depends upon its sacraments that somehow it's invincible. It can never be wrong. And that's why it has to act tough and talk tough. So I think eventually the real victim of that kind of approach is the Chinese people.

Certainly. And, you know, as much as we talk about China being integrated into the global economy, it's still important to remember that the U.S. very much is in several sectors and industries. Moving to our next topic today, senior Chinese military official General He Weidong is reportedly the latest purge target from the People's Liberation Army and Central Military Commission after several weeks of rumors regarding his disappearance from public forums.

The same source also reported that the minister of the General Logistics Department, Zhao Kusher, was also taken into custody. At least for General He, his association with President Xi Jinping dates back to his tenure in Fujian before continuing on as the head of the PLA's Eastern Theater Command. Miles, what is the significance of General He's and Minister Zhao's removals? And is there anything unique about this round of purges? Well,

purchase inside the Chinese military is pretty much like a cyclical. It happened more or less every 15 year or so. I mean, the first wave of purge in China took place around 19, you know, early 19

This is in the aftermath of the downfall, the purge of China's defense minister, Marshall Pondohuai. About 15 years later, you know, early 1970s, you got another major purge that occurred because Mao's right-hand man, his chosen heir apparent, Marshall Lin Biao, was allegedly demoted

decided to assassinate Mao and defected the Soviet Union. After that failed coup and another round of purge took place, hundreds, hundreds, hundreds of senior military leaders were purged. Of course, in the mid 1980s, some 15 years later, China offered this sort of very humiliating

fight with Vietnam in 1979, where China basically couldn't really carry out a full scale war. And China was shocked to see their debilitated military capabilities. So they started this round of military purge in 19, 1980s and then last down to a tenement massacre. So and then, of course,

after the first Gulf War, and China was shocked to see they were so far behind this high tech war. So Jiang Zemin initiated another round of purging in the mid 1990s. So let's carry on to 1920s when Xi Jinping ascended to supremacy in 2013, he decided

all right uh i gotta purge a whole bunch of people uh because you know they're not politically loyal so she means purging had a lot to do with the fact that he was not really deeply rooted in a purely heritage and pill the uh sort of a lineage so he had to purge all those guys uh that is he's not really personally promoted and that means he purchased the two most senior

Chinese military leader who has been long time bosses of Chinese military for the entire 1990s and early 1920s, early 2020s. That is General Guo Boxiong and General Xu Caihou. Those are two guys. One is in charge of the military development. Another one is China's top political commissar. That's General Xu Caihou. Those guys were the vice chair of the highest military command

That is the Chinese Central Military Commission, CMC. Once you purge these two, you got one problem. That is, you have virtually every senior military leader were promoted by these two gentlemen whom Xi Jinping purged.

That means you got to purge a whole bunch of people. That explains why during Xi Jinping's tenure now, almost 12 years, he purged over 100 senior military leaders who had anything to do with the former vice chairman of Guo Boxiong and Xu Caihou, which means by about five years ago, he has purged pretty much everyone promoted by those two guys. Those two guys were in charge of PLA for about 10 to 12 years.

So now you got a problem with people promoted by Xi Jinping himself. So that's why you see in recent years, couple of years, most of the people who were purged by him or his own protégés

That is very weird. You can see General Wei Fenghe, the rocket force commander, and his successors, two of them were purged. And He Weidong, by all accounts, was Xi Jinping's loyalist. He was promoted by several ranks, and we call it in Chinese politics, he rode the helicopter rise. Anyway, basically, it's a vertical rise to the top.

And he is now the number two in the, actually number three in the CMC, only after General Zhang Youxia. Now I have to point out that Zhang Youxia, who is the vice chair, number one of the CMC, was the only survivor of the previous regime under General Guo Boxiong and General Xu Caihou. So this is all very complicated, kind of Byzantine, but bear with me. This is a very big story.

Xi Jinping promoted the general He Weidong, who is apparently being purged right now. But the problem is general Zhang Youxia, the number one vice chair and general He Weidong, number two vice chair, they have pretty much

overlapping of their core competencies because unlike all previous two vice chairs of the cmc one is definitely going to be the military affairs expert another one is a political commissar the problem here is that both general zhang and general there are both

operation kind of guy. They have overlapping core competencies, in other words. And that's why you got enormous internal struggle and fight against each other for favor. So especially the turf war. And that's why Xi Jinping had to sacrifice one of them. That's my reading. And I think I'm right.

Yeah, like you mentioned, it's significant to see that not even Xi's number two general and number three in the CMC and longtime member of his political cadre is safe from further moves to centralized power. I should also point out that General He oversaw the Eastern Theater Command, which is the branch of the PLA that would ultimately be responsible for any planned operations against Taiwan.

and is significant in that way. I want to kind of build off of Miles what you mentioned in terms of historical patterns that emerge here, because there seems at least to me to be a historical parallel to the PLA purges

of Lin Biao and others under Mao when he shifted from a cadre model to further centralize PLA loyalty and control under himself. So Miles, let me ask you, do you see a similar development with the PLA under Xi Jinping? And where does this eventually lead regarding the future of PLA command structure?

Well, Xi Jinping actually did something very dramatic. He changed the... Well, if your previous one is about political purge, about strengthening Chinese military's fighting capability, Xi Jinping in 2016 actually did something kind of dramatic. He changed not only the personnel, he changed the command structure altogether. Field designation, for example. Traditionally, they have seven military regions.

He get rid of them and combine them into basically four theaters. Eastern Theater is one of them. And also he get rid of the general departments. There are four general departments, right? Political, logistics, you name it, right? But then he get rid of that and merge the functions of all the military high command organizations into 15 agencies of which he's chairman of all of them.

So that's why he has something that's very, very interesting and very dramatic, I might say. Now, the aftermath of that is still felt today. That is, once you put all those organizations with completely different functions, and many of them actually have developed their operational independence over the decades, together, you've got to have enormous inter-service rivalry and turf

uh fight and that's why i think you know right now you got the purchase going on because we're fighting amongst each other she even finally step in and say okay shut up kids i'm going to get rid of some of you that's basically uh what happened now if you look at all the purges since the beginning of the prc in 1949 you have pretty much three distinct uh features number one all of the purges occur when the supreme leader

their despotic position was threatened or in need of consolidation. It's a power struggle. So they got to get rid of people who they consider as disloyal or potentially not good for them. Secondly, all the purges have this objective of centralizing command authority. Every time you got a purge and the Chinese command authority gets centralized. Right now, Xi Jinping is the...

commander-in-chief obviously but he's also commander-in-chief of all these managerial functions in the same cmc the chinese central military commission is not only the commander authority is also general manager of everything xi jinping is general manager of everything thirdly all the purchase are accompanied by strengthening the role of political commissars

So right now, even though Xi Jinping, in order to fight the United States, fight the world, he has to promote people who are technically professionally competent. But that contradicts with his number one priority, that is political loyalty to himself, to the party. And oftentimes you've got these people who are very, really good, loyal to him, but once they reach the position of leadership,

and Xi Jinping suspected they're not really ideologically correct enough so they get rid of them one by one. You look at this, of all the Chinese military branches, the one that most technologically rich, technologically advanced is the Rocket Force.

and look at what happened to rocket for leadership every one of them in the last 10 years has been purged um so in other words it's like a you're you're promoted to the position of a commander commander of the rocket force is like a you know a temporary job on probationary base uh sooner or later you can be purged and so is this defense minister by the way

Yeah, and we'll have to keep an eye on who seems to be next up on this list. The Birch List certainly continues as even the highest level officials don't seem to be untouchable. Continuing with the PLA related news, we move to our final topic for today and return to cross-strait affairs where last week China staged a two-day military exercise involving drills

off the north, south and east coasts of Taiwan with deployed ships and aircraft maneuvers, as well as long range live fire drills in the East China Sea to test PLA integrated joint operations capabilities. These war games, as China tends to term them, come after Defense Secretary Hegsath's Indo-Pacific tour and were supplemented by a stern warning, as the Chinese spokesperson

quoted against separatism labeling President Lai Ching to a parasite. Taiwan's government, of course, condemned the exercises and reaffirmed confidence in Taiwanese resilience. But Miles, what can we make of the joint exercise from last week? And what does this mean for the current state of cross-strait relations? By the way, this exercise is

is more about a propaganda moral operation than it is real let me explain why uh china says involves 27 ships air aircraft and the patrolling around taiwan and uh but you look at it it's a it's a

is as a you know air defense adiz you know patrol it's farther away from taiwanese island itself and also they said that we conduct a live firing into eastern china sea does do you know colin how many of the chinese batteries were involved in this live firing during this round of exercise no i actually don't how many is about two companies worth of

That's about 400 to 500 people. And they're firing a bunch of cannons, fires into the open sea. That's it. So that's why the Taiwanese are used to this. Every time China does this kind of Taiwanese military drills, stock market went up. And the people basically go about doing their own business. Now, I'm not saying that's a good thing because the Chinese military threat is real. What I'm saying is from Chinese point of view,

all these things is about psychological intimidation of taiwanese people about sending a message and if you look at this uh unique situation right now uh in this round of military exercises which is distributed from the previous ones china said oh we deploy our aircraft carrier sandong you know the sandong ship is uh china's uh i believe the uh uh third military uh sort of uh aircraft carrier

It's not really that a menace to Taiwan at all because if you look at the standard oil, it cannot really sell that far because it has a power proportion problem. It has a lot of technical challenges. Most importantly, it's an offensive air operation wind is not really that up to standard.

Plus, Taiwan has one of the world's best anti-ship missiles, the Xiongfeng-3 series. So what I'm saying is, Taiwan is not belligerent, not as bellicose as the Chinese Communist Party. But I say this, that the Chinese Communist Party is very good at creating this overwhelming dominance of a narrative.

that somehow Taiwan is isolated, is helpless. It forced Taiwanese to surrender. This is what they're trying to do. And I think the efficacy is less and less obvious right now to the people in Taiwan. - Yeah, and I think that's a very important distinction to make. And I would like to call out that while these drills do not escalate to kinetic conflict, or at least haven't yet,

They apply significant pressure on Taiwan's material resources and systems fatigue, having to constantly issue alerts, ready air defense systems and deploy aircraft, etc., in case the drills do turn into a coordinated attack. But I think additionally, as we saw here in this joint military exercise, Reuters, among other media outlets, reported that

The Chinese military released a series of propaganda videos in rapid succession following the exercise that depicted warships and aircraft encircling Taiwan and land-based missile salvos. The videos were titled Closing In and Shell, and the latter was the one that depicted President Lai as a green cartoon bug calling him a parasite. Altogether, there were I think roughly three videos and a poster that was released in conjunction with these military exercises.

and really demonstrate what we've been talking about here on China Insider as a shift in China's approach to integrated gray zone tactics. Miles, I'd like to ask you, we've talked about the importance of China's shift in these coercion tactics incorporating social media, propaganda, and other soft power influence. Do you believe these strategies will work at the end of the day? And what does Taiwan need to focus on to ensure continued security against China's aggression?

Taiwan is an open society, so is the United States. There are always people who take different views. There are always people who say, "Ah, this Chinese tactic is gonna work. China's gonna invade Taiwan tomorrow." And there's also other people say, "Hey, listen, no, this is not really what's happening." So you have different views. I'm not saying which one is wrong, which one is correct. What I'm saying is that Chinese propaganda

propaganda is consistent. It's been going on for decades. So everything China is saying, we're going to do that through that. And a lot of people who who's true believer of Chinese military threat, I think they might write they'd be right to point out, you know, China's increasing belligerent. But if you study history, you will see this is not the new Chinese barrage against the Kimo and Matsu since 1950s going on until 1980s. Every day this is kind of stop.

We're gonna shift, we're gonna liberate Taiwan, we're gonna unify Taiwan tomorrow. So what I'm saying here is that do not be overly panic. Not everything that China does marks a shift

shift to anything new. But should we be worried about it? Of course. That's why our military does not believe in any timeline. The idea of talking about timeline is totally silly because timeline is not determined by Xi Jinping himself unilaterally. It also is determined by us, by the outside forces. Think about this.

If China say, oh, we're going to have an aircraft carrier, which is the pride of their Navy, what if China lost one carrier in the initial day of the conflict? That's going to be psychologically so devastating to China. So they have to consider those kind of things. In other words,

cost and chances of total winning. And they might be dragged into a war that they don't want to see for a prolonged period of time. China cannot afford that. Of course, the international response is one of the most important factors of determining the timeline. It's how the United States is going to do. And that's why the current military leaders doesn't believe any timeline, 2027, 2025. It's all nonsense. They believe

that Taiwan crisis, military invasion of Taiwan by China could happen any moment, any time, either today or five years from now. All we have to do is we're getting ready for the worst scenario. We're getting ready to fight against China's military invasion as if it's going to happen tonight. So that's why

always ready is our approach and any type of timeline is based upon any kind of illusion or unproven evidence there's nobody can really give us a sure timeline as to when china is going to launch the military action and we cannot really prevent

China from doing anything risky, but we can definitely modify their behavior, make them think twice before they take any provocative and unnecessary military moves. Well, we've unfortunately reached our time for today. Miles, as always, thank you for an excellent conversation and your insight into these issues. And we'll check in with you again next week. Okay, see you next week, Colin.