China is confident that it will be able to win the trade war started by US President Donald Trump.
This is reported by the British magazine The Economist.
The trade war between the US and China is escalating rapidly, with Chinese officials vowing to “fight to the end” after the US announced additional 50% tariffs, which have already taken effect.
The magazine notes that Trumpʼs long-term intentions are still difficult to understand. However, he is currently least interested in agreements with Beijing. He said that if China does not cancel mirror tariffs on American goods, the United States will stop any negotiations. But Beijing responded that this was "a mistake upon a mistake". And such tough rhetoric from Beijing seems to make dialogue between the countries impossible.
Until the latest round of tariffs, Beijing responded to US actions swiftly but with restraint. China sought to show that it would not allow itself to be humiliated, while avoiding too drastic steps so as not to harm its own economy. This tactic allowed negotiations to begin if the parties wanted to. But now, the tactics seem to have changed.
One reason is Beijingʼs feeling that it can win a trade war.
Trump is demanding a lot from China: stopping the flow of the drug fentanyl to the United States, helping end the war in Ukraine, a deal to sell TikTok. However, Beijing may wait until the United States is no longer dealing with inflation and American discontent over rising prices and unemployment due to Trump’s tariffs, rather than “fighting to the end”. This is quite risky, because by the time inflation hits the United States, the Chinese economy may already be seriously damaged.
The escalating trade war means Chinese leader Xi Jinping is being forced to step up support for the Chinese economy. The potential blow from US tariffs has been compared to the global financial crisis of 2007-2009. Local authorities are likely to help exporters find new markets outside the US. Analysts at brokerage Soochow Securities suggest that China could lower tariffs on the rest of the world and increase export subsidies.
However, Xi Jinping will have to decide whether he is ready to completely cut off economic cooperation with the US. The Economist notes that among the measures Beijing is considering is considering the possibility of completely ending cooperation with the US in the fight against fentanyl. Another proposal is to ban imports of American chicken and other agricultural products, including soybeans and sorghum, which are mostly supplied from states with more Republican support.
China could also impose restrictions on American services, in which the United States still has a trade surplus. This could include US consulting and law firms still operating in China. Beijing could also begin to inspect the intellectual property of American companies.
And the success of the Chinese cartoon “Ne Zha 2” and the failure of the American “Snow White” could be used as justification for restricting or even completely banning the import of American films.
What preceded
On April 2, the US President Donald Trump reported that he would impose tariffs on goods from other countries. The new tariffs will apply to more than 180 countries and territories (not including Russia, North Korea, Cuba and Belarus, which are already under sanctions). A 10% tariff was imposed on Ukraine.
China has also been included in the list of countries on whose goods tariffs are imposed. The tariff on Chinese goods is 34%. That is, Beijing has become one of the main victims of Trumpʼs tariffs, because this is the third wave of tariffs that Washington has imposed on Beijing since Trumpʼs re-election. Each time the tariffs are added up. After the first three stages of the trade war, they reached 54%.
On April 8, the US reported that additional 50% tariffs on Chinese goods had come into effect. That is, China has been subject to a 104% tariff since April 9. China has also imposed mirror tariffs on American goods.
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