China’s pain threshold for tariffs is “a lot lower” than the U.S.’, according to Stephen Moore, a former economic advisor to U.S. President Donald Trump.
Speaking at a Delivering Alpha event in Dubai, Moore said that China was Trump’s main target regarding tariffs.
He described the foreign economic policy as a “negotiating tool” from the Trump playbook and said it represents a “battle for global economic dominance and supremacy.”
Moore, who waivered over labeling the current dispute a trade war, said it’s more likely to evolve into a “trade skirmish.”
China “can’t win” the game of escalating tariffs as the country has an economy that is “not doing all that well,” he added.
“China is going to feel the effects of these tariffs,” he told CNBC’s Dan Murphy. “Trade wars are not good for either country. But their pain threshold is a lot lower than ours is.”
Moore served as a senior economic advisor during Trump’s first election campaign in 2016 and is currently a visiting senior fellow at the Heritage Foundation — an influential right-wing think tank in Washington and the engine behind Project 2025 which, among its 900-page mandate, calls for sweeping changes to the federal government.
Europe must ‘make a choice’
Moore also lambasted Europe’s position on China, claiming that “Europeans and the Brits and the Australians will have to make a choice” between the U.S. and China.
“I hope that the Europeans understand that this is about the survival of the planet, that we don’t allow China to take over Asia,” he said. Beijing and the European Union are also involved in a trade spat over tariffs on electric vehicles, however.
Economists have shared grim warnings over the trade escalating tensions, with Capital Economics’ Paul Ashworth saying Trump’s initial tariff announcement was “just the first strike in what could become a very destructive global trade war.”
Moore also backed the U.S. President’s motivations for potential tariffs on Mexico, Canada and China in what the administration has described as a bid to clamp down on imports of fentanyl and heroin drugs.
“If Trump can actually get Canada [and] Mexico to help keep these lethal drugs out of the U.S., it’s worth… paying more for the goods that come in from those countries,” he said.
China has pushed back on Trump’s comments about fentanyl, describing it as a “domestic issue,” while Mexico President Claudia Sheinbaum rebutted Trump’s claim of Mexico’s alleged alliances with criminal cartels as “slander.”
Trump said he would suspend tariffs on Canada and Mexico as the countries agreed to work to prevent the trafficking of fentanyl into the U.S., although his tariffs on China have gone ahead. China has retaliated with its own tariffs on certain imports from the U.S.
Trump has since said he will introduce duties on all steel and aluminum imports into the U.S.