From curbing the flow of fentanyl to boosting U.S. shipbuilding, Trump shared his plan on countering the Chinese regime.
News Analysis
During President Donald Trump’s first joint address to Congress on March 4, he outlined an array of actions he had taken in the first six weeks of his second term. One of the key topics he brought up was the threat posed by communist China.
Trump criticized the Chinese regime’s high tariffs on U.S. imports and expressed his desire to revitalize American shipbuilding to reduce U.S. dependence on China. Additionally, he mentioned that his administration had begun efforts to reclaim the Panama Canal from Chinese influence.
Imposing Tariffs on Chinese Products
“Other countries have used tariffs against us for decades, and now it’s our turn to start using them against those other countries,” Trump told his audience.
“On average, the European Union, China, Brazil, India, Mexico, and Canada. Have you heard of them? And countless other nations charge us tremendously higher tariffs than we charge them. It’s very unfair.”
He went on to highlight the numbers: “India charges us auto tariffs higher than 100 percent. China’s average tariff on our products is twice what we charge them. And South Korea’s average tariff is four times higher.”
The president made the remarks hours after an additional 10 percent tariff on all Chinese imports went into effect. The new levies, building on the initial 10 percent tariffs that went into effect on Feb. 4, are a direct response to the ongoing flows of illicit fentanyl from China into the United States, according to the White House.
Trump also imposed 25 percent tariffs on goods from Canada and Mexico, which went into effect on the same day, citing their failure to curb the deadly opioid and its precursor chemicals coming into the United States from China.
The president later granted a nearly one-month exemption for some of the goods from Mexico and Canada but chose not to do the same for imports from China.
Beijing has retaliated swiftly by imposing a 10 to 15 percent tariff on a wide range of U.S. agricultural products and adding more than two dozen U.S. companies to its export control or trade transaction lists.
These measures were in addition to its in-kind response to Trump’s first batch of tariffs a month ago, which includes 15 percent on LNG products and coal, 10 percent on crude oil, agricultural gear, and heavy trucks, and restrictions on rare earth minerals and substances with military applications.
Chinese leader Xi Jinping didn’t signal any intention to engage with Trump, unlike the leaders of Mexico and Canada in January amid the looming tariff hikes. Instead, Xi’s diplomats adopted a tough stance, insisting that the United States should tackle its domestic fentanyl crisis on its own.
A bipartisan report published by the House Select Committee on the Chinese Communist Party in April 2024 found that Beijing subsidized the manufacture of opioids by offering tax subsidies and grants to companies engaged in the creation and export of such drugs to the Americas even though the drugs are technically illegal in China.
The committee’s report also found that the Chinese Communist Party (CCP) has ownership stakes in some of the companies exporting fentanyl precursors.
Reviving US Shipbuilding
“To boost our defense industrial base, we are also going to resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding,” Trump said.
“And for that purpose, I am announcing tonight that we will create a new office of shipbuilding in the White House that offers special tax incentives to bring this industry home to America where it belongs.”
In 2023, a leaked U.S. Office of Naval Intelligence report showed China’s shipbuilding capability is more than 200 times greater than that of the United States.
In April 2024, the Office of the U.S. Trade Representative (USTR) launched a probe into China’s shipbuilding industry in response to a petition filed by a group of labor unions.
The USTR determined that China’s dominance in the maritime industry is “unreasonable” and “restricts U.S. commerce.” In January, the USTR released its findings, stating that China’s targeted dominance of the global shipbuilding, maritime, and logistics sectors is “actionable” under U.S. trade law.
Trump’s promise to revive U.S. shipbuilding coincides with an existing agreement between the United States and South Korea to repair U.S. naval vessels.
Taking Back the Panama Canal
“To further enhance our national security, my administration will be reclaiming the Panama Canal, and we’ve already started doing it,” Trump said.
“Just today, a large American company announced they are buying both ports around the Panama Canal and lots of other things having to do with the Panama Canal and a couple [of] other canals,” he said, referring to the agreement reached between a consortium led by BlackRock and Hong Kong-based CK Hutchison Holdings Ltd.
The Panama Canal “was built by Americans for Americans, not for others,” Trump said. “But others could use it.”
Trump pointed out that “38,000 workers died building the Panama Canal,” describing the construction process as a “tremendous cost of American blood and treasure.”
“They died of malaria. They died of snakebites and mosquitoes. Not a nice place to work,” he added.
In 1999, Panama took full control of the canal, now one of the busiest shipping lanes in the world, connecting the Pacific Ocean and the Caribbean Sea. The transfer of ownership was under a 1977 deal signed by then-President Jimmy Carter, which consists of the Neutrality Treaty and the Panama Canal Treaty.
“But that agreement has been violated very severely,” Trump said. “We didn’t give it to China, we gave it to Panama, and we’re taking it back.”
Panamanian President José Raúl Mulino announced on Feb. 2 that his country would not renew its participation in Beijing’s Belt and Road Initiative (BRI). Mulino said the agreement was set to expire in two to three years but could be terminated sooner.
Launched by the CCP in 2013, the BRI, also known as “One Belt, One Road,” is a multi-billion dollar infrastructure project designed to strengthen China’s geopolitical influence.
In November 2017, Panama was the first Latin American country to join the CCP’s BRI, just five months after the country shifted its diplomatic ties from Taiwan to China.
Critics have called the BRI a “debt trap,” as it offers substantial loans to participants, mostly developing nations, for building railways, airports, and other infrastructure projects. Recipient nations, such as Pakistan and Sri Lanka, have already found themselves saddled with heavy debt to China, which they struggle to repay.
Andrew Thornebrooke, Dorothy Li, Frank Fang, Emel Akan, and Tom Ozimek contributed to this report.