Why? The reasons can be summed up briefly as follows:
1. China is not as dependent on the US as Trump seems to imagine.
2. China's leadership is in an unchallengeable political position domestically. Anyone who attempts to mount any effective critical attack on its policy choices will be silenced and will probably end up in jail.
3. In any case, large parts of the Chinese population look back on China's history from the mid 19th to mid twentieth centuries as a 'century of humiliation', during which their native land was really and indisputably "looted, pillaged, raped and plundered by nations near and far." They have good reason to do so, given the historical facts of what happened, and they are likely to be supportive of a government that simply refuses to be pushed around by the US.
This article sets out some of the hard economic and political facts behind Chinese reactions to Trump's attempts at coercion. He will not come well out of this.
China unlikely to blink first as Trump’s trade war enters uncharted new territory
Amy Hawkins, Guardian, 9 April 2025
The opening shots seem like a distant memory. Back in January, US president Donald Trump threatened to impose a tariff of 10% on Chinese imports. Less than three months later, the rate is now 104%.
China has condemned the tariffs. As well as applying its own reciprocal tariff of 84% on US imports, Beijing has been fighting a war of words.
“When challenged, we will never back down,” said China’s foreign ministry spokesperson, Lin Jian. The commerce ministry said: “China will fight to the end if the US side is bent on going down the wrong path.” Further countermeasures have been promised by Beijing.
The tit-for-tat measures could spark fears of a race to the bottom, with ordinary people suffering as prices rise and a fears of a global recession grow.
But although China’s economy has in recent years been beset by its own challenges, when it comes to tariffs specifically, Beijing is unlikely to blink first.
“For President Xi, there is only one politically viable response to Trump’s latest threat: Bring it on! Having already surprised domestic audiences with a forceful 34% reciprocal tariff, any appearance of backing down would be politically untenable,” says Diana Choyleva, founder and chief economist at Enodo Economics, a forecasting firm.
One of the most helpful factors in Beijing’s favour is the fact that the US is far more dependent on Chinese imports than China is on the US.
The main items that the US imports from China are consumer goods, such as smartphones, computers and toys. Last week, analysts at Rosenblatt Securities predicted that the cost of the cheapest iPhone available in the US could rise from $799 to $1,142 – and that was when Trump’s China tariffs were just 54%. “Trump cannot credibly deflect blame on to China for these economic hardships,” Choyleva says.
In contrast, the goods that China imports from the US are industrial and manufacturing supplies, such as soya beans, fossil fuels and jet engines. It is much easier for price increases in these commodities to be absorbed before a consumer gets their wallet – or in the case of China, their smartphone – out to pay.
[See original article for a chart]
Plus, this is not China’s first rodeo. Since Trump’s first trade war with China in 2018, China has ramped up trade with other countries, making it less dependent on the US. Between 2018 and 2020, Brazil’s soya bean exports to China increased by more than 45% compared to the 2015-2017 average, while US exports declined 38% over the same period. China is still the largest market for US agricultural goods, but the market is shrinking, hurting American farmers. In 2024, the US exported $29.25bn of agricultural products to China, down from $42.8bn in 2022.
China has other measures up its sleeve. On Tuesday, two influential nationalist bloggers published identical lists of possible Chinese retaliations, based on sources. China’s foreign ministry declined to comment on the articles but did not deny their content either.
The suggestions included suspending cooperation on fentanyl control, investigating US companies’ intellectual property gains in China, and banning Hollywood films from China. On the final point, a top-down embargo may not be necessary. China has in the past allowed online nationalists to whip up grassroots boycott campaigns. In 2017, Chinese consumers participated in a mass shunning of the South Korean supermarket chain Lotte, in response to the conglomerate’s involvement in a deal that allowed a US missile defence system to be installed in South Korea, which China saw as a security threat. Nearly half of the company’s more than 100 stores in mainland China were forced to close.
China’s strategic advantages do not make it totally immune from a trade war. The stock markets in China and Hong Kong are falling. Beijing has not yet figured out a way to meaningfully boost domestic demand, something that economists say is essential to truly tariff-proof the economy.
The political impact of Trump’s tariffs, coupled with the fear that the US is trying to turn other countries against China, is pushing US-China relations to an all time low. “I do not remember ever being this pessimistic about the trajectory of US-China relations,” wrote China analyst Bill Bishop in a newsletter. “The trade relationship is the linchpin between the two countries, and as it breaks we should probably expect other areas to see more stress.” But as the Trump administration talks of “Chinese peasants” and suggests that China is playing with a weak hand, Beijing is unlikely to back down anytime soon.
