China has a plan to win Trump’s trade war

The United States and China are locked in an economic war. They’ve levied tit-for-tat tariffs on each other, and there’s little sign of detente.

President Donald Trump said in a statement Tuesday that “The ball is in China’s court. China needs to make a deal with us. We don’t have to make a deal with them.”

Meanwhile, a spokesperson for China’s commerce ministry said at the start of the week that the US needs to “take a big step to correct its mistakes, completely cancel the wrong practice of ‘reciprocal tariffs’ and return to the right path of mutual respect.”

My colleague Miles Bryan recently produced an episode of Today, Explained that’s all about China’s response to Trump’s tariffs, so I asked him about the stalemate we’re seeing, and what all this means for China. Our conversation, edited for length and clarity, is below.

So Miles, we’re in a trade war with China right now, right? What’s going on?

Well, it’s been changing nearly every day. So it might change by the time this publishes, but things really took a turn on April 2, when President Trump announced his “Liberation Day” 10 percent baseline tariffs on every country, with higher so-called reciprocal tariffs on many countries on top of that.

That led to days of chaos, stock market swings, bond market problems, and to President Trump deciding to pause those reciprocal tariffs.

However, he left big tariffs on China. As of us talking on Tuesday, they’re at 145 percent for most items, which is just a massive, a massive blow to trade between the United States and China.

In the last couple of days, the administration’s walked the scope of its tariffs on China back a bit, putting a pause on a lot of consumer electronics — think things like the iPhone — though Trump says tariffs on those goods are coming back down the line.

So what we’re left with is a trade war against the world that’s kind of in suspended animation, but a trade war against China that’s very real.

Got it. Now, a lot of countries are — at least according to Trump — trying to negotiate on tariffs, but China, if anything, seems to be taking an aggressive, even antagonistic stance. Why is that?

China is not backing down.

And they are kind of needling the administration. State media, Chinese social media users, and the Chinese Embassy in the United States have been putting out all these reports and funny cultural memes, things like videos of Mao Zedong, you know, sounding belligerent in the early ’50s, when the Chinese were fighting the United States in the Korean War; pieces on how dependent Trump is on China for his merchandise; and even strange AI-generated videos showing fat Americans, stitching together Nikes in an American factory looking sad.

It’s stuff designed to hit us where it hurts in terms of stereotypes, but also to point at the inanity of our seeming attempt to reshore things like shoe and T-shirt factories.

And that’s just on the culture front.

Right, China is really digging its heels in overall, and I think that’s for a few reasons.

The first is, China’s been preparing for this for years.

Trump put tariffs on China during his first administration, and the experts and journalists I talked to said China wasn’t particularly well-prepared for that. But Chinese leaders learned from that, and since then, they have been preparing, hardening their markets, and building relationships with other countries.

Two, they feel like this is an existential question for China and for the legitimacy of China’s Communist Party, which is an authoritarian country. They both want to show China’s strength and believe there is no upside to trying to work with Trump.

They see how Trump treats countries that acquiesce. They look at how Trump treats America’s allies. They look at how he treated Zelenskyy in the Oval Office. And they say, That kind of belittling is unacceptable, so they don’t see any other course but to hold their ground.

Three, the experts I talked to told me that Chinese leaders just think that they can tolerate pain to a much higher degree than the United States can. Over the last decade, China has really made a concerted effort to develop its economy and its industrial base around the technologies of the future. We all know China makes lots of stuff for the world, but now it also makes some of the best electric cars in the world, some of the most advanced robotics, some of the best EV battery technologies — these are things that if the US doesn’t want, Europe or other places will buy.

There aren’t elections in China in the way we think of elections. Dissenting media and voices are suppressed very effectively. They just have the capacity to ride this out in a way that they think the United States doesn’t, and there are pieces of evidence that support that belief: Trump walked back the reciprocal tariffs when the bond market looked shaky, he paused tariffs that would affect big American companies like Apple. He’s been signaling that he wants President Xi Jinping to call him. They have a lot of reason, good reason, to think that they’re going to be the one that can grin and bear it for longer.

Does China then stand to gain anything from this way that the US doesn’t?

China’s leadership says, and the experts I talked to agree, that nobody wins a trade war. This is going to hurt Chinese exporters. It’s going to hurt the Chinese economy, which has been suffering for the last couple of years due to a property crisis, and because Chinese consumers haven’t been spending enough money.

The Chinese economy is kind of anemic, and this is going to probably make that worse.

That said, a trade war is also going to cost American consumers a lot of money, and it’s going to hurt American manufacturers who end up sourcing parts from China, even if they put them together here.

Ironically, the US putting big tariffs on low-value items like shoes and T-shirts, but pausing the tariffs, at least for now on things like electronics, only encourages China to put more focus on the advanced manufacturing of the future, which could arguably put the country even further ahead technologically.

The folks I talked to for this episode suggested that in the medium to long term, China could come out of this looking like the more stable partner. Chinese President Xi Jinping has been in Vietnam and making overtures to the European Union recently, saying like, Hey, we’re the standard bearers for normalcy and stability, work with us. That outreach could really boost their standing and boost their trading relationships outside of the United States.

When I went into reporting this story, I thought the trade war would put China in position to dominate the world, and the war was going to be good for China. But I heard over and over again that this is going to make the whole world not just poorer, but more dangerous.

I learned that trade between the United States and China is a stabilizing force in our relationship. And the experts I talked to mentioned issues like the sovereignty of Taiwan as things that could become a lot more uncertain if there isn’t trade binding the United States and mainland China together. Without trade, China has less of a reason to not act unilaterally and invade or blockade, or do other stuff that we don’t want to see happen.

So we’re not necessarily now looking at a future where China is in charge?

My reporting suggested that the trade war might have sped up the movement towards a more multipolar world, one where China doesn’t replace the United States as the global cultural and economic hegemon, but maybe the US loses that position. China and the United States may both have their spheres of influence and spheres of trade, coexisting, but in a fraught — potentially explosive — way.

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