Peter Thiel Backs Trump’s Trade Revolution Targeting China

Billionaire venture capitalist endorses President Donald Trump’s push to recalibrate the U.S.-China trade relationship for greater balance.

Peter Thiel, the sole prominent Silicon Valley figure to back Trump in 2016, told fellow billionaire tech investor and American Optimist host Joe Lonsdale that while he’s cautious about commenting on the details of Trump’s trade tariffs on China, he supports the need for a “reset” in relations with the communist regime.

“I’m hesitant to comment since obviously it’s a very, very fluid situation, but something like the sort of reset that they’re talking about now seems where we’re going, where you need a very drastic reset with China,” Thiel told Lonsdale. “In theory you need to reset with other people, but what we really need to get them to do is also reset things with China.”

Peter Thiel on Trump’s tariffs against China: “You need a very drastic reset with China. In theory, you need to reset with other people, but what we really need to get them to do is also reset things with China.” pic.twitter.com/Y9bgdDGoYm

— Josh Caplan (@joshdcaplan) April 11, 2025

However, Thiel acknowledged the efficiency of certain economic ties with China, such as low-cost labor at factories like Foxconn, but emphasizes the need to address the broader geopolitical rivalry that economists often fail to adequately consider.

“There are ways the economic relationship with China is fairly efficient,” Thiel said. “If people are working for a dollar and a half an hour in a Foxconn factory, we don’t really want to get those jobs in Wisconsin.”

“But it is this geopolitical rivalry where you have to somehow factor in that the economists never are able to factor in properly with China,” the investor continued.

“I’m not sure I would call this the optimistic plan, but the reset in trade that seems desirable to me would be that we radically changed the relationship with China and we sort of induce a lot of other countries to radically change their relationship with China,” he added. “Maybe that’s how we build a stronger western alliance of the free world.”

Thiel then suggested that leveraging AI and reforming anti-business policies could enable some manufacturing to return to the U.S., while also advocating for shifting production from China to countries like Vietnam, which, despite its flaws, poses less of a global geopolitical threat.

“I think there are some parts that can be moved to the US with AI. Maybe also if you change some of the environmental rules and some of the other anti-industrial policies we have in the US,” Thiel told Lonsdale. “But then if parts of this are moved to other emerging market countries. Vietnam is a communist country.”

“It has bad mercantilist policies, but it’s not planning to take over the world. And so at the margins, if we can move things from China to Vietnam, that’s a big win,” the billionaire added.

On Friday, China escalated its tariffs on U.S. imports to 125%, in response to the Trump administration’s statement yesterday that U.S. duties on Chinese goods now stand at 145%, driven by earlier fentanyl-related tariffs.

Chinese leader Xi Jinping said Friday that his country is “not afraid” of a trade war against the U.S.

“The successive imposition of excessively high tariffs on China by the US has become nothing more than a numbers game, with no real economic significance,” a spokesperson for China’s Commerce Ministry said.

“It merely further exposes the US practice of weaponizing tariffs as a tool of bullying and coercion, turning itself into a joke,” the spox added.

Despite Xi’s remarks, Trump is “optimistic” that the U.S. and China can reach an agreement over tariffs, White House press secretary Karoline Leavitt told reporters Friday.

“The president … would be gracious if China intends to make a deal with the United States. If China continues to retaliate, it’s not good for China. The United States of America is the strongest, best economy in the world, as evidenced by the more than 75 countries who have called the administration immediately to cut good deals,” Leavitt said.