For Donald Trump, the target was always China. Beijing knew about it and was getting ready to mount a challenge. Last month, when Trump started with 10% tariff on all Chinese imports, Beijing warned that it was ready to fight any type of war with the US.
The Chinese US embassy said on X, “If the war is what America wants, then it is a tariff war, a business war or any other type of war, we are ready to fight until the end,” Chinese US embassy said a government’s statement on X saying a line on X. Since then, the trade war between the world’s two superpowers and the largest economies has increased to a great extent, neither Trump nor Xi Jinping, their Chinese counterpart, prepared to return.
When Trump announced a large scale tariff against China and most of the world, which he called “liberation day”, his colleagues suggested that he wanted to negotiate better terms with American business partners and he reduced them after negotiations.
‘Bad actor’
On Wednesday, when Trump stopped tariffs for the rest of the world for 90 days, except China, American Treasury Secretary Scott Besent said investors did not understand Trump’s tariff strategy. “The market did not understand, they were maximum levels,” Besent said, Trump said “taking advantage of maximum conversation for himself”, and that Chinese “has shown themselves as bad actors”.
There is no doubt that Trump was under great pressure to make a strategic comeback from his supporters, as most of the world’s tariffs at the health of the American economy as well as threatened the global economic system. This also created a rift within his administration, as was clear in the public line between Elon Musk and his business advisor, Peter Navarro.
Although Trump says he still wants to make a deal with China, he is not very keen to offer any major concession to Beijing. This is because he really believes that the communist should be investigated by the country’s trade practices and the growing presence in the American economy – and if one can dare to challenge China, it can only happen to him.
Why does Trump take China out?
It is true that Trump has been a strong lawyer of tariffs for nearly 40 years. He even implemented him during his first term, although not so harshly. During decades of globalization for decades, he promised his campaign to bring back lost jobs in China and other countries and restore the US manufacturing base.
Most Americans, not only Trump supporters believe that China has incorrectly benefited from globalization. The United States helped Beijing to join the World Trade Organization in 2001; China never looked back after that. The government used its communist system and large scale manpower to make China a world factory.
Within eight years of joining the WTO, Beijing became the world’s largest goods exporter, being the seventh largest in 2000. Within 20 years, its economy grew 12 times and foreign exchange reserves increased to $ 2.3 trillion from sixteenfolds.
China’s stake in world building increased from only 6% to 32% in 2000. Its production is now larger than joint manufacturing of the United States, Germany, Japan, South Korea and Britain. But Trump and his advisors feel that China has increased at the cost of the United States and other industrial countries.
Unfair trade practices
This is a common perception in the US and many other countries that do not play with China rules. It has been alleged that it is stealing technology from the West to develop its high -tech industries. It is using large -scale state subsidies to reduce its products, manipulate your currency and to protect your own markets from imports.
According to some estimates, the result is a trillion dollar in total, with a large -scale trade deficit with the rest of the world. In 2024, its trade deficit with the United States, its largest trading partner, was $ 295 billion.
In response to the tariff imposed by Trump in his first term and by Biden, China outsourced some of its manufacturing in other East Asian countries such as Vietnam, Cambodia, Malaysia and Indonesia. After this, to avoid tariffs, the products prepared from those countries were sent to the US. This is the main reason behind Trump’s Dracian tariff.
China’s export-oriented plant
However, what seems to be the most worrying of the United States of how China is getting ready for the future. It is now developing new industrial capabilities and opening new manufacturing units to promote its exports. This is a threat to manufacturing in the United States. “On the banks of the cities of China, new factories are being made day and night, and existing factories are being upgraded with robots and automation,” the new York Times Reported last week.
Chinese companies are also setting up plants abroad to occupy foreign markets. Last year, India decided to allow foreigners to enter electric car manufacturing, Chinese auto giant, Byd proposed to invest $ 1 billion in the country. The Modi government rejected it and later agreed to Tesla on a similar proposal. The message was clear: ‘no’ for China but ‘yes’ for America or West.
These export-oriented industries go hand in hand with China’s mining and processing of rare earth minerals, which are important for modern high-tech products. China controls 70% of their deposits and 90% of their processing technology. The United States depends a lot on these imports.
Losing American market will pinch
As a result of tariffs since Trump’s first term and diversification of sources, the US part of goods from China fell to 13% last year, from 21% in 2016.
If new American tariffs remain on China, the prices of some American products will rise, which may be a challenge for the Republican party in the Congress elections due to two years. But Trump believes that his political basis understands his concern about China.
Of course, tariffs on the whole world must have been a separate issue, which on Wednesday tells its decision to target China and prevent action on the rest of the world.
What is she thinking
However, in China, the landscape is different. President Xi may not need to contest elections, but he cannot tank his economy, which depends on export income. The Communist Party leadership has promised to pump billions of dollars in a sick economy. He is now in danger.
The expansion of the factory network across the country is based on the assumption that exports will continue to grow. If Beijing loses its largest market, it will be difficult to find its products for alternative buyers. Already, the Chinese economy has not completely recovered from the collapse of the housing market in 2021. The accident made many Chinese people poor, causing domestic consumption. Therefore, the Chinese manufacturers’ industry cannot sell additional consumer goods at home.
What can China do?
China has already announced its anti -counter tariff against the United States. It has targeted American farmers, the base of Trump, and has imposed more restrictions on export of important minerals.
Beijing has also filed a complaint against the US in the WTO. But the business body is practically toothless; Trump can easily ignore it.
However, President Xi has other options if she really wants to hurt the United States. China is the second largest holder of American debt after Japan, which it can dump. Earlier this week, there were rumors in the US market that Chinese were playing when briefly, the value of the American Treasury went down and the yield increased.
If China takes such action on a large scale, it can increase the cost of borrowing in the US. Beijing can also decide to sell a large part of its dollar property, which is estimated to be approximately $ 3 trillion.
But this is unlikely to happen because Beijing knows that the US Federal Reserve will immediately interfere to protect the fiscal system and Trump will take large -scale repayment action against China. He can separate Beijing and Xi in the same way that Biden separated Russia and Putin. Imagine that China is being expelled from the Swift Banking system!
There is a fear in the West and some other countries that China will try to dump products that it cannot sell to America in other countries. The European Union has already warned against him. India should also be on guards.
Diplomatic campaign
Chinese officials have never been active in seeking cooperation from other countries in recent memory. On Tuesday, the Chinese Embassy in Delhi called for a “standing” to India and China, called the “abuse of tariff” of America. The embassy also emphasized the need to stand together for the global south.
On the same day, Chinese Premier Lee Kiang spoke to the European Commission Chairman, Ursula von Der Leyen, and said that Beijing was committed to promoting cooperation and fair trade. On the eve of Tarif’s big announcement of Trump, Chinese Commerce Minister Wang Wonto met his South Korean and Japanese counterparts in Seoul for the first meeting of his business ministers in five years.
The Chinese state media stated that the three countries jointly agreed to respond to the US tariff, a vigor “something exaggerated”, while Tokyo said that there was no such discussion.
These are efforts by China to unite and fight with some US allies against Trump’s tariff policy. But these countries are due to doubt about China’s intentions. Beijing has been in border disputes with most of its Asian neighbors. And the European Union sees Beijing as a major strategic threat as the US. It is not surprising if the West finally begins to see India as an alternative to China.
Therefore, there is no choice for China but to interact with Trump. The trade war between the world’s two largest economies will harm both, but China will be a big defeat. Tight for the sack will not take them anywhere. As Mahatma Gandhi said, “One eye for one eye will make the whole world blind.” The question is, who will blink the eyelid first? Trump or Xi?
(Naresh Kaushik is former Editor of Associated Press and BBC News and is located in London)
Disclaimer: These are the personal opinions of the author
