When Treasury Secretary Scott Bessent says Trump “set a trap,” he’s referring to a strategic use of tariffs not just to apply economic pressure, but to provoke a predictable reaction from China that could ultimately work to the U.S.'s advantage.

Here’s how the "trap" likely works:

🪤 The Setup: Trump Raises Tariffs

Trump imposed steep tariffs on Chinese goods, signaling that the U.S. was willing to play hardball. The message to other countries was:

"If you don't retaliate, we might make a deal. But if you do, it escalates."

It was a public show of strength — a test.

🪤 The Expected Reaction: Retaliation

China, to save face and maintain its own negotiating leverage, responded with retaliatory tariffs on U.S. exports. This was a predictable move.

🪤 The Trap: Capital Flight + Manufacturing Exit

Here's where the trap closes:

1. Investor Uncertainty:
   By retaliating, China deepens the trade war. Global investors get spooked. Foreign capital starts fleeing China in search of safer markets (like the U.S., which was growing strongly at the time).

2. Manufacturing Shift:
   U.S. companies and multinationals, seeing rising costs and instability, begin moving supply chains out of China to other countries (e.g., Vietnam, Mexico, India). This weakens China’s role as the “world’s factory.”

3. Self-Isolation:
   By retaliating, China appears aggressive or confrontational — reducing its appeal as a reliable trade partner.

🪝 Why It’s a “Trap”

The U.S. could have tolerated some short-term pain (tariffs increase prices for consumers), but the long-term damage to China's economic positioning — via capital flight, supply chain relocation, and reputational damage — was asymmetrically greater.

China couldn’t afford not to retaliate politically, but doing so triggered deeper economic vulnerabilities — exactly what the U.S. may have wanted.

Summary

Trump's trap was psychological and economic:

• Psychological: Use China's need to retaliate against it.

• Economic: Push companies and capital to reconsider China as a dependable partner.

And once China retaliated — the trap “sprung.”