Five Cards China Holds in a Trade War with the United States

The trade war between the two largest economies in the world is now in full swing.

Chinese exports to the United States faces up to 245% tariffs, and Beijing has abandoned 125% with US imports. Consumers, businesses and markets are attracted to greater uncertainty, as the fear of global recession has intensified.

Chinese President Xi Jinping has repeatedly stated that it was open to the dialogue, but warned that it “would fight the end” if necessary. “

Here is a view that he has in his arsenal to resist US President Donald Trump’s tariff.

China-second-country economy in the world, which means that it can absorb the impact of tariffs better than other smaller countries.

With more than a billion people, he also has a huge domestic market that can exert part of the pressure on exporters.

Beijing is by -tipped with keys because The Chinese are spending insufficient. But with many incentives, from subsidies for household appliances to “Silver Trains” For travel retirees, this may change.

And Trump’s tariffs gave the Communist Party of China an even stronger impetus to unlock the country’s consumer potential.

The guide may “very well ready to survive the pain to avoid the surrender to what they believe is US aggression,” Mary Maria, US-Kita Trade Expert at the Peterson Institute in Washington, BBC Newshour reported earlier this month.

China also has a higher pain threshold as an authoritarian regime, as it is much less worried about short -term public opinion. There are no elections at the angle that will judge his leaders.

However, the unrest is caused by care, especially since dissatisfaction with the current property and loss crisis.

Economic uncertainty over tariffs is another blow for young people who only knew China.

The party appeals to nationalist sentiments to justify their retaliation tariffs, and state -owned media call on people “thunderstorms together”.

President Xi Jinping can worry, but still Beijing has been challenged and a confident tone. One official assured the country: “The sky will not fall.”

China has always been known as the world factory – but it poured billions to become much more advanced.

According to the XI, it was in the race with the US for the dominance of technology.

He invested large funds in home appliances, from renewable sources to chips to AI.

Examples include chatbot deepseek who was is marked as a formidable competitor Catgptand byd, which last year beat Tesla to become the world’s largest manufacturer (EV). Apple loses its price share in the local competitors market such as Huawei and Vivo.

Beijing recently announced plans to spend more than $ 1tn over the next decade to support innovation in II.

US companies tried to cancel their supply networks from China, but they struggled to find the same infrastructure and skilled work elsewhere.

Chinese manufacturers at each stage of the supply chain give the country perennial benefits that will take time to repeat.

This unsurpassed supply chain examination and support for the government made China a formidable enemy in this trade war – in some ways Beijing is preparing for this from Trump’s previous term.

Ever since Trump’s tariffs have hit Chinese solar panels back in 2018, Beijing has stopped his plans for the future outside the world order under the leadership of the United States.

He downloaded billions in Controversial Program Trading and InfrastructureIt is better known as the Belt and Road initiative to raise ties with the so -called global south.

Expanding trade with South -East Asia, Latin America and Africa occurs when China tries to wean itself from the US.

US farmers once supplied 40% soybean imports – this figure now ranges from 20%. After the last trading war in Beijing, the growing soy house increased and bought record volumes from Brazil, which is now the largest soy supplier.

“The tactic kills two birds with one stone. It deprives the American farmer’s belt of the once-calico market and expels food security powers in China,” says Marina Jue Zhang, Associate Professor of the Institute of Relations in Australia and China in Sydney.

The US is no longer the largest export market in China: this place is now owned by Southeast Asia. In fact, China was the largest trading partner for 60 countries in 2023 – almost twice as much as the US. The world’s largest exporter, which at the end of 2024 made an excess of $ 1TN recorded.

This does not mean that the US, the world’s largest economy, is not an important trading partner for China. But that means Washington will not easily return China to the corner.

After the message that the White House would use bilateral trade negotiations to highlight China, Beijing warned countries against “Achieving the transaction through China’s interests.”

That would be Impossible choice For most of the world

“We can’t choose and we will never choose (between China and the US),” said the Minister of Trade in Malaysia Tengk Zafrul Aziz at the BBC last week.

Trump kept solid because the shares fell after its wide tariffs in early April, comparing its stunning levies to “medicine”.

But he made a turn, stopping at most of these tariffs within 90 days after a sharp sale in US government bonds. Also known as the Treasury, they have long been regarded as safe investment. But the trade war shocked confidence in assets.

Since then, Trump has hinted at de -escalation in trade tensions with China, saying that the tariffs for Chinese goods are “significantly decreasing, but it will not be zero”.

Thus, experts say that Beijing now knows that the bond market can crack Trump.

China also has $ 700 billion in US government bonds. Japan, an unwavering American ally, is the only owner who does not own the US who owns more.

Some claim that this gives Beijing impact: Chinese media regularly swam the idea of ​​selling or holding US bond purchases as “weapons”.

But experts warn that China will not appear intact from this situation.

Rather, this will lead to huge losses for Beijing’s investment into the bond market and destabilized the Chinese yuan.

China will only be able to pressure the US government bonds “only up to the point”, says D -Rus. “China has a trade chip, not financial weapons.”

However, what China can equip is almost a monopoly in the production and processing of rare land, a number of elements important for advanced technologies.

China has huge deposits such as dysproys used in magnets in electric cars and wind turbines, and Yttrium, which provides thermal coating for jet engines.

Beijing has already responded to Trump’s latest tariffs, restricting the exports of seven rare lands, including some that are needed to create a circuit.

According to the International Energy Agency (IA), there are about 61% of rare land production and 92% of their processing.

While Australia, Japan and Vietnam started mining rare land, years passed before China could cut out of the supply chain.

In 2024, China banned the exports of another critical mineral substance, which is crucial for various production processes. Its price has doubled the purchase of panic and search for alternative suppliers.

Fear is that the same thing can happen to the rare land market, which will severely disturb different branches from electric cars to protection.

“Everything you can turn on or off is likely to work on rare land,” Thomas Krummer, Director of International Trade and Investment Jindeer, said BBC before.

“The impact on the US protection will be significant.”