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On October 15, U.S. Treasury Secretary Bessent said 85 senators authorized the president to impose a 500% tariff on Chinese purchases of Russian oil.
Just a few days ago, Trump just announced a 100% tariff on China, which caused the US stock market to plummet, and now it has to increase to 500%?
And this “unprecedented” tariff scheme is packed with a sound fair name – “Ukrainian Victory Fund.”
Trump’s logic is that by imposing massive tariffs on China, the money it earns is used to buy weapons for the Ukrainian army, forcing Russia back to the negotiating table.
Ukraine Victory Fund
On October 15, the day Besent announced the plan, Ukraine President Zelensky was preparing to visit Washington on Friday.
In Brussels, NATO members have just concluded a key meeting focusing on two topics, one of which is the possibility of delivering long-range missiles to Ukraine.
The second is how to raise US$120 billion for Ukraine's armed resistance in 2026. The Ukraine Defense Minister made it clear at the meeting that at least half of the US$120 billion must come from countries that support Ukraine.
Even in the United States, in the context of the current government shutdown and debt ceiling crisis, it is difficult to get so much money at once, so Trump has come up with a "one stone more bird" approach.
Imposing 500% tariffs on China, using the money to fill the Ukraine’s funding gap, Bezent said clearly at a press conference in Washington.
“President Trump has instructed the ambassador and me to inform our European allies that whether we call it a ‘Russian oil tariff’ or a ‘Ukrainian victory tariff’ to China, we are supporting it.
But our Ukrainian allies and our European allies must be willing to follow suit. As long as European partners join, we will take action. "
The U.S. is “seeking excuses” for this tariff scheme, but it has only one purpose: taxing China.
The United States does not intend to bear the consequences of this policy alone, so he wants to pull Europe together.
If the 500% tariff is an economic means of Trump’s pressure on Russia, then providing tactical missiles to Ukraine is a deterrent at the military level.
The tactical axis missile is one of the "city treasures" of the United States, with a long range and high precision, capable of hitting Russian targets deep behind the front.
The United States is the only country in the world to produce Tomahawk missiles and sell them to its closest allies. Once Ukraine obtains such weapons, Russia's strategic depth will face a serious threat.
U.S. Defense Secretary Hegseth's statement at the NATO meeting is very deterrent. Although he did not explicitly mention the Tomahawk missile, he hinted that the United States was ready to provide Ukraine with the "firepower" it needs to achieve "peace through strength."
He also stressed: "If this war can't be ended, and if there is no road to peace in the short term, then the United States will work with its allies to take necessary measures to make Russia pay the price.
If this step is to be taken, the U.S. Department of Defense is ready to perform our duties in a way that only the United States can do.”
This passage sounds tough, but there is a mystery hidden in the details. "The United States provides weapons and Europe pays for it.
The new regulations on rare earth export control released on October 9 have indeed brought a lot of commotion to the market. Although the United States also has rare earth mines, it lacks processing capabilities.
China's expansion of rare earth control this time is tantamount to choking the life of the US military industry. The day after China announced rare earth control, Trump announced that he would impose an additional 100% tariff on Chinese imports from November 1st in response.
But that wasn’t enough, a harsher 500% tariff scheme came out a few days later, with Bessent and U.S. Trade Representative Gerrard issuing a joint statement accusing China of controlling the flow of rare earth “as a denial of the six-month Geneva-US agreement.”
But they avoid mentioning that the United States itself has just expanded export controls to China, which will increase the number of Chinese enterprises included in the "entity list" from about 3,000 to more than thousands.
In this context, Bessent threw a "exchange condition" that if China stopped imposing strict export controls on rare earth, the U.S. could extend the Sino-U.S. ceasefire for more than three months.
We must know that after four rounds of economic and trade negotiations, China and the United States have reached several rounds of 90-day tariff ceasefire agreements. This moratorium will expire in November this year.
But China’s rare-earth controls are a necessary measure to safeguard national economic security and industrial competitiveness, which cannot be easily withdrawn because of the US threat.
Indian "soft tomatoes" and Russian "tomates"
Force Putin back to the negotiating table by weakening Russia's energy revenue. Trump has made Indian Prime Minister Narendra Modi promise to stop buying Russian oil, and now he wants China to do the same.
"Threatening China to refuse to buy Russian oil" is a surface article, the real purpose of which is to force China to revoke rare-earth export controls. Bessent has repeatedly stressed that "European partners must join", in fact, is encouraging Europe to be a "headbird."
If Europe follows the United States to impose tariffs on China, China-EU trade relations will inevitably deteriorate, and Europe will only become more dependent on the United States in the future.
On October 15, Trump was pleased to announce that Indian Prime Minister Modi had promised him that India would stop buying fossil fuels from Russia.
Why did Modi give in? Because Trump had previously imposed a 50% tariff on India, 25% of which was added on the grounds of "buying Russian oil".
India's economy is highly dependent on exports. A 50% tariff will reduce India's exports to the United States by 50%, drag down GDP growth by 0.8 percentage points, and affect millions of jobs.
But in the end, India is still down, which shows in Trump's eyes that India is just a "soft tomato" that can be picked up at will.
Just at the height of the US-China economic and trade war, Russian Foreign Minister Lavrov suddenly made public statements that Russia will never form an alliance with any country against other countries, especially against China.
Lavrov's words equal to eating a "confidence bullet" to China, and also to pour a bowl of cold water into America's so-called "United Russia" strategy.
The 500% tariff threatened by Trump will probably not be implemented, and this tax rate itself is unrealistic. The 500% tariff means that the price of a $100 Chinese commodity in the US market will soar to $600.
Few consumers will buy at this price, and American businesses and consumers will be the first to suffer.
The 500% tariff requires congressional authorization and a series of complex legal procedures.While Bessent claims that "85 senators have been authorized," the specific content and legal effect of this authorization is currently unclear.
The attitude of the EU is also a variable. European countries have different attitudes on whether to follow the United States to impose tariffs on China. After all, the economic and trade relations between Europe and China are huge. Once they are fully decoupled, the European economy will also suffer heavy losses.
Trump's 500% tariff threat is more a means of political pressure than a real policy to be implemented.
He wants to use this "extreme pressure" to force China to make concessions on the issue of rare earth control, and at the same time show domestic voters the image of "I am tough".
conclusion
After several years of trade wars, China has established a more sophisticated counter-tools box and also accumulated sufficient response experience.
The threat from the United States has been difficult to work as before.
Trump’s “Ukrainian Victory Fund” plan now looks more like a political show.