China’s strategy against Trump: This is how the dragon strikes back

Donald Trump has covered the world with punitive tariffs, but as it turns out, most negotiation masses are to enforce his ideas of trade relationships with brute means. With one exception: China. With Beijing, reconciliation is neither to be expected nor desired. It looks like a new cold war in international trade. Customs of up to 145 percent mean the end of all trade. China countered on Friday with an increase in tariffs from 84 to 125 percent. In addition, there is a WTO complaint to legally contest the US measures. Such surcharges stop any trade relationships.

The Trump government seems to be able to assume that China can force China-comparable to the end of the USSR in the late 1980s when the Soviet system collapsed through economic problems. The Communist Party in Beijing has the same power as Moscow once. But the Chinese economy is characterized by long -term growth and industrial innovation – not by the paralyzing agony of late Soviet era. Programs such as “Made in China 2025” promote technological self -sufficiency, for example in semiconductor production. The division – bifurcation – of the international system has been predicted by experts for years, and Beijing also knew that decoupling from the USA was imminent. “They have been preparing for five years for five years,” says Andrew Polk, who heads the Trivium, based in China, to the London “Times”. “It is unthinkable that you have not played through this scenario.”

China has some trump cards in her hand. It is nominally the second largest economy in the world; Peking has long since overtaken the USA. Beijing will block this market, especially in segments in which the USA are extremely exported. The US film industry is already going on. According to the state media, the import of American poultry and other agricultural products could be completely banned and American service companies such as law firms and consulting companies could be sanctioned. In addition, China started anti-dumping examinations against US imports such as medical devices and targeted companies such as the chemical giants Dupont due to antitrust violations. Should Trump advance a complete decoupling of the US hemisphere of China, the collaboration would become pointless. Beijing could set the cooperation in the fight against Fentanyl after it tightened its controls for preliminary products in 2024. The United States suffers from the synthetic drug, whose pre -products often come from China and are processed in Mexico.

Beijing also blocks exports that Trump needs. China has introduced export controls for rare earths that are decisive for the production of high-tech products such as electronics, batteries and military equipment. At the same time, Beijing wants to boost internal consumption of around 1.4 billion Chinese. For this purpose, the budget deficit should increase from three to four percent. New subsidies for the service sector and infrastructure projects should cushion unemployment.

The US share of China’s exports is already falling-from almost 20 percent in 2018 to around 14 percent last year. By duty -free agreement with African states and an export increase to Southeast Asia by ten percent in 2025, Beijing compensates for losses. Nevertheless, the elimination of the US market will hit the Chinese economy hard, since China’s exports to the United States are still more than $ 400 billion annually. In addition, the EU is threatening that the market is increasingly isolating its market, for example by tariffs of up to 35 percent on Chinese electric vehicles. But the Chinese population is likely to be capable of suffering. China has lost jobs earlier: When it was prepared for accession to the World Trade Organization in 2001, the restructuring of state industries led to 50 million jobs away within a few years.

A disadvantage for Beijing is that Trump works with a system of punitive tariffs. Covering the entire world with tariffs would overwhelm the US economy and consumers. But if countries like Vietnam – an emerging workbench in the world – are agreed with Trump and treated better, the production of many goods from China could migrate into these countries. Apple and its suppliers employ about one million people in China, but the company also maintains factories in Vietnam and India. In addition, there are China’s homemade problems, such as the collapse of the real estate market after the strict Corona-Lockdown.

Experts assume that the economic data from China, which continues to report solid growth, are beautified. Western analysts appreciate real growth in 2025 to 2 to 3 percent instead of the official 4.5 percent. On the other hand, comparisons are difficult because Beijing calculates its gross domestic product more conservative than western industrialized countries. If the same would be created, the Chinese economy would be significantly larger than shown. The unpredictable character of the Trump government also plays in Beijings’s hands. Beijing hopes to profile himself as a more reliable trading partner and ultimately as a world leader. For this, China will strengthen its efforts as part of the BRICS countries, for example through alternatives to the Swift payment system. In forums like the G20 summit, Beijing actively advertises countries in the global south such as India and Brazil.

Another means of pressure is the US state bonds. In November 2013, China held about $ 1.317 trillion and was the largest foreign creditor in the United States. By January 2025, China reduced this inventory to $ 760.8 billion. At the same time, Beijing expands its gold reserves to over 2300 tons to reduce the dependency on the dollar. Beijing is emphasized in the new trade war. The Ministry of Commerce said that Trump’s “extortion” would not be bended, but that this struggle “will be fought” to the end “.