Special Ep. - Can the US and China rebuild trust?

In this special edition of the Association of Foreign Press Correspondents-USA podcast on global trade, Ana Swanson, trade and international economics reporter for The New York Times, sits with Merle A. Hinrich, chairman of the Hinrich Foundation, to discuss the role trade has played in the long arc of US-China ties, his perspectives on the superpower summit in Beijing, and what likely comes next for the world’s most important bilateral relationship.

In late May 2026, days after President Donald Trump visited his Chinese counterpart Xi Jinping in Beijing in a pivotal summit for the world’s most important bilateral relationship, Hinrich Foundation Chairman Merle Hinrich wrote an opinion editorial for the foundation’s Thought Leadership weekly. His essay, The US-China Trust Deficit, critiques the failures on both sides to move beyond domestic messaging to the more crucial task of mending longer-term trust between their nations.

Trade has long underpinned the US-China relationship. That foundation is now under unprecedented strain. In this podcast with The New York Times’ award-winning veteran journalist Ana Swanson, Hinrich explores how decades of globalization shaped and warped the bilateral relationship, why Washington and Beijing now both view trade through geopolitics, and what rising protectionism, industrial policy, trade weaponization, and declining trust mean for the future of the global economy.

A new multilateral trade framework might emerge “that is really very focused upon the balancing of the economic issues.”

“Because if you don't have the domestic support for cross-border trade, you have a problem,” he said.

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Transcript

Key excerpts and takeaways, slightly edited, from their conversation:

On superficial diplomatic outcomes:

Ana Swanson: So you wrote an article recently about the statements that came out of the visit that President Trump made to China in May.

Merle Hinrich: There was a lot of fanfare regarding the meeting and thank heavens the meeting took place. But the outcome of the meeting described, I guess, different stages or the possibility of different bargains or different views that each of the two parties had, which was, I considered, unfortunate. There could have been more specificity in what that outcome actually represented as trade, but it seemed to be a record of conversation that was formed for domestic consumption purposes on both sides. The Chinese framed it in a way that would be appropriate to their domestic community and the US framed it for their community. So it was rather political. It was fortunate that they had that meeting, but the outcome, as far as trade was concerned, was really quite questionable.

On China's industrial policy:

Ana Swanson: I wanted to ask you about the role that trade has traditionally played in the US-China relationship. I know that you yourself have had a long career in business in Asia. How have you seen trade between US and China evolve, and how would you describe the situation today in comparison to that history?

Merle Hinrich: Well, it wasn't until China [acceded to] the WTO in 2001 that things really started to change. But, as you know, there were some 15 years prior to that of negotiations for China's entry into the WTO… But, as you want to basically summarize this, in the initial few years, basically the West provided the demand for Chinese exports, and those exports were derived not just from Chinese entities, but they were derived from major foreign-directed investments of multinational companies. So these multinationals, European, Japanese, and American, invested heavily in China... What happened, of course, is that the Chinese learned how to manufacture all of the products and also the byproducts of these various industries and went from being a student, basically, to being the leader in these industries. And now what we have is we have oversupply.

On the rise of Western "tariff fortresses":

Ana Swanson: The US and China have so many tensions and strategic risks in this relationship, but there's still a lot of mutual dependency. Where do you see that relationship headed?

Merle Hinrich: There are going to be three outcomes of this, in my view. One, of course, is the Western strategy, and we could probably characterize it as a “tariff fortress” and Europe is headed that way. The US is definitely headed that way… China is by far the largest competitor and threat to US and European industries that has ever existed. And this is not going to abate anytime soon. The China strategy, of course, is going to be to circumvent, to bypass, and one of those objectives will be to increasingly invest in outlet countries that have access through the USMCA (US-Mexico-Canada Agreement) to gain entry to the world's largest market and growing markets. China will also dominate the demand in Southeast Asia and Africa because they will be producing the most competitive and, indeed, in many cases, the most innovative and quality products. The US and European consumers will pay for increased costs, and it will be inflationary.

On the multilateral imperative:

Ana Swanson: When you say an alternative multilateral organization, how do you envision that coming together, or where would that happen?

Merle Hinrich: Well, it has to deal more effectively with the impact to the consumer... Just to step back for just a second, if you step back a few years, you can see how politics have played an increasing role in trade decisions, trade policy, and trade-related issues, to today where it is of massive consequence. So, going forward… the issue is about where the consumers, or I should say where the workers, have some level of protection from the competition that that represents. A multilateral organization unlike the WTO – (though) I would say there (would be) aspects of it that are very similar – but that is really very focused upon the balancing of the economic issues. Because if you don't have the domestic support for cross-border trade, you have a problem.