The world is getting a live-fire demonstration of the “escalate to de-escalate” doctrine as the Trump administration’s China policy unfolds. The shocking threat of 100% tariffs is the dramatic escalation, a move so extreme it is designed to fundamentally alter the negotiating landscape and force a rapid de-escalation on American terms.
This doctrine, often discussed in military and diplomatic strategy, has been adapted for trade. As described by one analyst, it involves threatening “outlandish and ridiculous tariff figures” to create a crisis that is more painful than making concessions. The theory is that a rational opponent will choose to de-escalate and make a deal rather than suffer the consequences of the threatened escalation.
The strategy is high-risk, high-reward. If it works, the U.S. could potentially extract major concessions from China far more quickly than through traditional diplomacy. The sheer shock of the 100% figure is meant to break the current stalemate and force Beijing to recalculate its interests.
However, the doctrine carries a significant risk of backfiring. It assumes the other side will react “rationally” by backing down. China’s response, however, has been one of defiance, promising retaliation. If Beijing refuses to be intimidated and chooses to escalate in return, the doctrine fails, and both sides are left in a far more dangerous and destructive conflict.
For now, the world is trapped in the escalation phase. The $2 trillion market loss is the immediate cost of this strategy. The global economy now waits to see if the de-escalation phase will ever arrive, or if this demonstration of the doctrine will end in a catastrophic failure.