Globalization a Mistake In Many Ways, David Malpass

David Malpass, former President at the World Bank, discusses the economic and geopolitical policies of the second Trump administration and what President Trump must do to gain broader support in his second term.

President Donald Trump has dialed down his confrontational tone with China in an effort to secure a summit with counterpart Xi Jinping and a trade deal with the world’s second-largest economy, people familiar with internal deliberations said.

Six months into his second term, Trump has softened his harsh campaign rhetoric that focused on the US’s massive trade deficit with China and resulting job losses. The warmer posture contrasts with his threats against other trading partners to ravage their economies with crushing tariffs.

Trump is now focused on cutting purchase deals with Beijing — similar to one he forged during his first term — and celebrating quick wins instead of addressing root causes of the trade imbalances. China posted a record trade surplus in the first half of the year amid booming exports.

On Tuesday, the US president said he would be fighting China “in a very friendly fashion.”

In meetings with his staff, Trump is often the least hawkish voice in the room, some of the people said.

Administration officials stressed that Trump has always liked Xi personally and pointed to moments in his first term when he nevertheless imposed sweeping restrictions on Huawei Technologies Co. and tariffs on the majority of Chinese exports.

Trump’s fluid playbook and his departure from promised hawkish policies have worried policymakers inside his administration as well as outside advisers, the people said. This week only exacerbated concerns that previous US red lines with China are now negotiable.

Allowing Nvidia Corp. to sell its China-focused, less-advanced H20 chip once again — something multiple senior officials had said was not on the table — reversed the administration’s own stated approach of keeping the most critical American technologies out of Beijing’s hands.

Treasury Secretary Scott Bessent last month cited H20 controls as evidence of the administration’s toughness on China when pressed by senators who worried the US could trade advanced semiconductors for the Asian country’s rare-earth minerals.

While the US will still require approval for such exports — a restriction former President Joe Biden declined to impose — some Trump officials have privately objected to granting licenses they say will only embolden China’s tech champions, the people said.

Others have argued successfully that allowing Nvidia to compete with Huawei on its own turf is essential to winning the AI race with China. That view, championed by Nvidia Chief Executive Officer Jensen Huang, has gained traction inside the administration, people familiar with the matter said.

‘Productive’ Talks

Trump has the final say in all trade decisions, an administration spokesman said. The president has “consistently fought to level the playing field for American workers and industries, and the Administration continues to have productive discussions with all of our trading partners,” White House spokesman Kush Desai said.

In a further effort to ease tensions, US officials are preparing to delay an Aug. 12 deadline when US tariffs on China are set to snap back to 145% after the expiration of a 90-day truce. Bessent signaled in a Bloomberg Television interview this week that the deadline was flexible.

One person familiar with the plans said the tariff truce could be extended another three months. This comes as Trump is rolling out duties for other countries — including key allies — and threatening more actions on industries including pharmaceuticals and semiconductors.

Last week, US Secretary of State Marco Rubio said a summit between Trump and Xi is likely. Rubio, once among the staunchest China hawks in the Senate, said he had a “very constructive and positive” sit-down Friday with Chinese Foreign Minister Wang Yi.

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