When the president of the United States, Donald Trump, retired from his plan to impose mitigating tariffs on commercial partners worldwide, there was a key exception: China.
While the rest of the world would be given Beyond the new 10 percent rates for all US business partners, China would feel the squeery further. On April 9, Trump raised the rate on Chinese products to 125 percent.
The measure, in Trump’s narration, was promoted by “lack of respect for China’s global markets. But Trump could well have been about to China’s apparent disposition to face US tariffs head -on.
While many countries chose not to retaliate against Trump’s now delayed reciprocal tariff walks, instead of favoring negotiation and dialogue, China took a different tactic. He responded with fast and firm countermeasures.
On April 11, China ruled out Trump’s movements as a “joke” and .
The two economies are now locked in a high intensity commercial confrontation. And China does not show signs of backward.
And as an expert in relations between the United States and China, I would not expect China to do it. Unlike the First Commercial War between the United States and China during Trump’s initial term, when China anxiously sought to negotiate with the United States, China now has much more influence.
In fact, China believes that it can inflict at least so much damage to the US as vice versa, while at the same time expands its global position.
A changed calculation for China
There is no doubt that the consequences of tariffs are serious for manufacturers oriented to China’s export, especially those in coastal regions that produce furniture, clothing, toys and appliances for US consumers.
But since Trump first launched an increase in the rate in China in 2018, a series of underlying economic factors have significantly changed the calculation of China.
Crucially, the importance of the US market for the economy promoted by China’s export has decreased significantly. In 2018, at the beginning of the First Commercial War, exports to the United States represented 19.8 percent of China’s total exports. In 2023, that figure had fallen to 12.8 percent.
Tariffs can even more incorporate China to accelerate their “expansion of domestic demand” strategy, unleash their consumers’ expenditure power and strengthen their national economy.
Amid the rates, the president of China, Xi Jinping, feels a historical opportunity. Fountain: Getty / Carlos Barria
And while China entered the 2018 trade war in a phase of strong economic growth, the current situation is quite different. The slow real estate markets, the capital flight and the “decoupling” western have led the Chinese economy to a period of persistent deceleration.
Perhaps intuitively counterproductive, this prolonged recession may have made the Chinese economy more resistant to clashes. He has promoted companies and policy formulators to take into account the hard existing economic realities, even before the impact of Trump’s rates.
Trump’s tariff policy against China can also allow China to an external external expiato, which allows it to gather public feeling and change the guilt of economic deceleration to the aggression of the United States.
China also understands that the United States cannot easily replace its dependence on Chinese products, particularly through its supply chains. While direct imports of the United States of China have decreased, many goods now imported from third countries still depend on components or raw materials made in Chinese.
By 2022, the United States trusted China for 532 categories of key products, almost four times the level in 2000, while China’s dependence on US products was reduced by half in the same period.
There is a calculation of related public opinion: it is expected that upward tariffs increase prices, something that could cause discontent among US consumers, particularly blue neck voters. In fact, China believes that Trump’s tariffs run the risk of pushing the previously strong US economy towards a recession.
Powerful tools for reprisals
Along with him China also has a series of strategic tools for reprisals against the United States.
The global supply chain of rare earth, criticism for military and high -tech industries dominates, which provides approximately 72 percent of the imports of the Rare earths of the United States. UU., According to some estimates. On March 4, China placed 15 American entities on its export control list, followed by another 12 on April 9. Many were defense contractors of the United States or high -tech companies that depend on rare earth elements for their products.
China also retains the ability to go to key agricultural export sectors of the United States, such as poultry and soy, industries depend largely on Chinese demand and concentrate on the states of republican inclination. China represents approximately half of US soybeans exports and almost 10 percent of US poultry exports. On March 4, China revoked import approvals for three great US soybeans exporters.
And on the technological side, many US companies, such as Apple and Tesla, remain deeply linked to Chinese manufacturing. Tariffs threaten to significantly reduce their gain margins, something that China believes that it can be used as a source of influence against the Trump administration. According to reports, China plans to go back through regulatory pressure on US companies operating in China.
Meanwhile, the fact that Elon Musk, an expert in Trump senior who has faced the American commercial advisor Peter Navarro against tariffs, has important commercial interests in China is a particularly strong wedge that Beijing could explode in an attempt to divide the Trump administration.
A strategic opening for China?
While China believes that Trump’s radical tariffs can resist bilaterally, he also believes that the United States against its own business partners has created a generational strategic opportunity to displace US hegemony.
Near home, this change could significantly remodel the geopolitical landscape of East Asia. Already on March 30, after Trump had raised the rates for the first time to Beijing, China, Japan and South Korea organized their first economic dialogue in five years and promised to advance a free -member trilateral trade agreement.
The measure was particularly notable given how carefully the United States had worked to cultivate its Japanese and South Korean allies during the Biden administration as part of its strategy to counteract Chinese regional influence. From China’s perspective, Trump’s actions offer the opportunity to erode directly to the United States in the Indo-Pacific.
Could the Chinese dragon economy kill Trump’s rates? Fountain: Getty / Wang Zhao
Similarly, Trump’s pronounced tariffs on Southeast Asia countries, which were also an important strategic regional priority during the Biden administration, can bring these nations closer to China. The Chinese state media announced on April 11, President Xi Jinping, state visits to Vietnam, Malaysia and Cambodia from April 14 to 18, with the aim of deepening “general cooperation” with neighboring countries.
In particular, the three nations of Southeast Asia were attacked with reciprocal tariffs now paid by the Trump administration: 49 percent in Cambodian goods, 46 percent in Vietnamese exports and 24 percent in Malaysia products.
Further from China is an even more promising strategic opportunity. Trump’s tariff strategy has already led China and European Union (EU) officials to contemplate the strengthening of their own previously tense commercial ties, something that could weaken the transatlantic alliance that had tried to decoup down China.
On April 8, the president of the European Commission made a call with the Prime Minister of China, during which both parties condemned together and advocated free and open trade.
Coincidentally, on April 9, the day China raised tariffs on US assets to 84 percent, the EU also announced its first wave of retaliation measures, imposing a 25 percent rate on selected imports from USA.
Now, EU and Chinese officials have conversations about existing commercial barriers and considering a full right summit in China in July.
Finally, China sees Trump’s tariff policy as a possible weakening of the international position of the US dollar. Generalized tariffs taxes to several countries have shaken the confidence of investors in the economy of the United States, which contributes to a decrease in the value of the dollar.
Traditionally, treasure bonds in dollars and the United States have been seen as Haven assets, but recent market agitation has questioned that state. At the same time, the pronounced tariffs have expressed concern about the health of the economy of the United States and the sustainability of their debt, undermining confidence in the treasure bonds of the dollar and the United States.
While Trump tariffs will inevitably hurt parts of the Chinese economy, China seems to have many more letters to play this time. He has the tools to inflict significant damage to the interests of the United States, and perhaps the most important thing, Trump’s tariff war is providing China a rare and unprecedented strategic opportunity.
Sunday is a candidate for a PhD in Political Science at the University of Auburn.
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