Xi Jinping desires you to know that he is not going to be cowed.
Confronted with the latest threat from President Trump of an extra 50 % tariff on Chinese language items until Beijing reverses its retaliatory levies on U.S. imports, China’s prime chief has remained defiant. His Ministry of Commerce on Tuesday accused the USA of “blackmail” and declared that Beijing would “battle to the tip.”
However behind the bravado is a extra sophisticated set of realities for Mr. Xi that makes it politically and economically untenable to supply concessions to the nation’s single largest buying and selling companion and chief rival for international affect. With Mr. Trump additionally refusing to again down, a devastating commerce warfare between the 2 largest economies could also be inevitable — a showdown with painful penalties that can be felt internationally.
The dilemma for Mr. Xi is that wanting weak shouldn’t be an possibility, however hitting again dangers additional escalation. The Chinese language chief has solid himself as a nationwide savior who’s rejuvenating his nation’s greatness. Consequently, Beijing has much less flexibility to again down from a battle with Washington, as other U.S. trading partners like Vietnam have tried, as a result of it may undercut Mr. Xi’s legitimacy, analysts say.
“Beijing’s response thus far has emphasised three issues: resolve, resilience, and retaliation,” mentioned Julian Gewirtz, a former senior China coverage official on the White Home and State Division below President Biden who’s now writing a ebook on U.S.-China relations.
“Xi has constructed up a picture of himself as a defiant strongman helming a robust nation, and China’s official messaging is conveying that they’re decided to face as much as U.S. strain even at excessive prices,” he mentioned.
That helps clarify why China scuttled a deal to promote a portion of TikTok to American traders final week in response to Mr. Trump’s sweeping tariffs, and why it’s resisting a sale of the ports owned by the Hong Kong firm CK Hutchison alongside the Panama Canal.
It additionally performs into why Beijing on Tuesday threatened extra countermeasures if Mr. Trump went by means of with imposing an extra 50 % in tariffs on Chinese language items. China has mentioned it’s prepared to carry talks, however not below duress.
China’s leaders are additionally doubtless calculating {that a} conflict with the Trump administration is inevitable, analysts say. Mr. Trump’s tariffs final week — which additionally focused international locations like Vietnam and Thailand, the place Chinese language firms have arrange factories to skirt earlier U.S. tariffs — could be seen in Beijing as proof that Washington is decided to dam China’s rise.
“From this vantage, there may be little to be gained from capitulating to Trump’s newest demand, as a result of it might not resolve the underlying problem from the USA,” mentioned Ryan Hass, the director of the John L. Thornton China Middle on the Brookings Establishment. “At greatest, they consider, it might merely postpone America’s dedication to destroy China’s financial system.”
The rising tensions make a gathering between Mr. Xi and Mr. Trump more and more unlikely.
Mr. Trump, who regards unpredictability as his signature weapon, has mentioned he’s open to partaking with Mr. Xi, even suggesting the Chinese language chief would go to. However Chinese language officers are reluctant to schedule a meeting till the 2 sides have negotiated particulars prematurely.
Even when Mr. Xi have been to cave and undergo Mr. Trump’s calls for to cancel China’s retaliatory tariffs, it’s unclear what, if any, commerce deal would make a significant dent within the yawning commerce imbalance between the 2 international locations. America imported $440 billion price of Chinese language items final yr, greater than 3 times the worth of the $144 billion of U.S. items that China imported.
Beijing sees Mr. Trump as singularly centered on undermining China’s dominance in exports with the intention to deliver manufacturing again to the USA, mentioned Yun Solar, the director of the China program on the Stimson Middle in Washington.
“Decoupling could be the endgame,” Ms. Solar mentioned, describing how China is probably going deciphering Mr. Trump’s motives.
Mr. Xi has lengthy warned that China’s rise would doubtless not go unchallenged by the West, and invested closely in efforts to construct up China’s self-reliance.
This week, as inventory markets around the globe tumbled, Beijing mobilized state-owned banks and funding firms, recognized informally in China because the “nationwide group,” to shore up their holdings of Chinese language shares in an effort to stem the decline. Chinese language shares rose barely on Tuesday after huge declines a day earlier.
And the Folks’s Each day, the Communist Social gathering’s mouthpiece, revealed a commentary on Sunday urging Chinese language residents to trust in China’s means to climate the tariffs. The piece argued that China has expanded its commerce markets outdoors the USA and that the Chinese language financial system is rising extra self-sufficient with the assistance of breakthroughs in expertise like artificial intelligence.
Economists say these factors are true, however {that a} full-blown commerce warfare on the size threatened by Mr. Trump will nonetheless inflict appreciable ache on China. If the Trump administration imposes an extra 50 % tariff, it may deliver the U.S. levy on Chinese language items to 104 %. For some merchandise, although, the speed is prone to be a lot greater due to tariffs that date again to Mr. Trump’s first time period.
Chinese language exporters won’t be capable of merely divert their items to different international locations as a result of the flood of Chinese language exports has already been met with concern in main markets just like the European Union.
On the similar time, on this sport of tariff brinkmanship, analysts in China assume Mr. Trump can be extra prone to succumb to home strain to alter tack due to the hovering prices of products and plummeting inventory values in the USA.
“If it’s a query of who can endure extra ache, China is not going to lose,” mentioned Wang Wen, dean of the Chongyang Institute for Monetary Research at Renmin College in Beijing.
America wanted China, Mr. Wen mentioned, greater than China wanted the USA as a result of Chinese language factories make components and parts that can’t be discovered anyplace else on this planet.
“Different international locations will purchase items from China after which promote them to the USA,” he mentioned.
A part of China’s technique has additionally been to make use of the chaotic penalties of Mr. Trump’s tariffs to attempt to attract the remainder of the world away from Washington’s orbit.
Mr. Xi is reportedly planning to go to Southeast Asian international locations together with Vietnam subsequent week. Beijing has additionally tried to undertaking a united entrance with Japan and South Korea towards Mr. Trump’s tariffs, although officers in Tokyo and Seoul, which each depend on America for safety, have distanced themselves from the Chinese language place.
On the identical day that Mr. Trump unveiled his tariffs, China’s Overseas Ministry posted a video on social media casting the USA as a supply of hurt and instability, with references to the U.S. president’s push to deport migrants and to tariffs imposed on automobiles newly delivered at a port. “Do you wish to stay in a world like this?” a narrator asks.
That was adopted by scenes of Chinese language peacekeeping troops and Chinese language rescue groups pulling victims out of the rubble after Myanmar’s latest earthquake, laid over a soundtrack that includes John Lennon’s “Think about.”
“There’s no query Beijing is milking this second,” mentioned Danny Russel, a diplomacy and safety analyst on the Asia Society Coverage Institute in Washington. The Overseas Ministry’s video is “pure propaganda jujitsu” aimed toward “portray Trump’s tariffs as reckless U.S. chaos whereas China provides order and partnership.”
“However the view from Beijing is conflicted,” Mr. Russel mentioned. “Beijing’s intuition is to keep away from interrupting its enemy when he’s making a mistake, however they’re additionally deeply frightened these errors may crash the worldwide financial system, and China with it.”
