As the dust settles from President Trump’s trade policy upheaval, one undeniable focal point remains: China.
As the world’s second-largest economy and the United States’ largest trading partner, China has been at the center of Trump’s long-standing accusations about unfair trade practices. “World leaders were ‘kissing his ass,’ dying to do a deal,” Trump remarked at the National Republican Congressional Committee’s President’s Dinner, just hours before new tariffs went into effect.
However, one leader who certainly wasn’t bending over backwards was China’s President, Xi Jinping.
Fueled by frustration over China’s perceived audacity, President Trump raised tariffs to a staggering 145% for certain products, while other nations were granted a 90-day reprieve. In retaliation, President Xi imposed 125% tariffs on U.S. imports. It was clear: the gloves were off. Yet, Team Trump hinted they remained open to negotiations. “Pick up the phone, come to the table,” urged Peter Navarro, the White House’s Chief Trade Adviser, during an appearance on Fox News. But the phone remained silent.
“At some point, hopefully in the near future, China will realize that the days of ripping off the USA and other countries are no longer sustainable or acceptable,” President Trump expressed on his social media platform, Truth Social. But will that realization come?
Some analysts argue that Trump’s approach is unlikely to alter China’s course. “Instead of China evolving to mirror the United States, the United States has increasingly adopted behaviors reminiscent of China’s own,” stated Michael Froman, former U.S. Trade Representative and current President of the Council on Foreign Relations, in his piece for Foreign Affairs. He added, “While Washington may have forged a liberal, rules-based order, China has defined its next chapter with protectionism, subsidies, and restrictions on foreign investment.”
The common belief among Washington and Brussels for years was that integrating China into the global trading system would propel the nation toward economic liberalization, leading to greater political freedoms for its citizens. Yet, the reality has proven starkly different. Rising prosperity in China has coincided with a tightening grip of authoritarian rule, an avid pursuit of state-controlled economic policies, and a fierce crackdown on dissent.
The crackdowns extended to a variety of groups, including protesters in Hong Kong, human rights activists, Uyghurs, journalists, and even party members who did not demonstrate unwavering loyalty to Xi Jinping.
Yet, despite these domestic challenges, foreign investment continued to flood in. Trump was not alone in voicing concerns over China’s trade practices. Since China’s accession to the World Trade Organization in 2001, members have expressed grievances regarding state subsidies, cheap labor, currency manipulation, and coerced technology transfers that disadvantage other nations’ industries.
China has rejected these accusations, arguing its robust stimulus measures played a crucial role in rescuing the global economy post-2008 financial crisis. Nevertheless, resentment lingered from those who felt that China had manipulated the rules of the game in its favor.
In January, the European Commission lodged a formal complaint with the WTO, citing “unfair and illegal” trade practices related to intellectual property rights. For years, Europe has clashed with China over what it perceives as an overwhelming influx of cheaper Chinese products undermining its domestic industries, from shoes and toys to electric vehicles.
Even before Donald Trump made waves in the political arena, previous U.S. administrations criticized China’s manipulation of global trade. The Obama administration, for instance, initiated multiple challenges at the WTO, stating that China’s practices were “not transparent, predictable, or fair.”
By the time Trump assumed office in 2016 and rolled out his initial tariffs on China, many American businesses operating in the region expressed support for his stance. Conversations I had with executives in Beijing revealed their frustrations over being pressured into joint ventures and forced technology transfers while competing against Chinese state-backed enterprises. They viewed Trump’s aggressive tariffs and rhetoric as a long-overdue correction.
However, this anticipated change did not materialize, partly due to the COVID-19 pandemic, which halted international trade, and partly because China had been preparing for global economic shocks well in advance. “Beijing, and especially Xi Jinping, likely feels justified in the choices made over the past decade,” commented Jacob Gunter, a lead analyst at MERICS, a Berlin-based think tank. He elaborated, “Mr. Xi was the original ‘de-coupler’, ensuring that China became less reliant on the U.S. in every aspect.”
“We have now entered a period of ‘protracted struggle’ with the United States and its allies,” he said, indicating that it remains to be seen whether China’s preparations were indeed sufficient.
In recent years, China successfully diversified its export markets away from the U.S., strengthening trade ties with European nations and developing economies around the globe. Exports to the U.S. plummeted from approximately 20% of total exports to below 13% since the beginning of the Trump administration.
In its quest for self-reliance, China has promoted domestic consumption, albeit with limited effectiveness, as Chinese consumers traditionally lean toward saving rather than spending. Furthermore, in 2015, Beijing announced an ambitious, state-sponsored industrial policy dubbed “Made in China 2025,” aiming to dominate key manufacturing and technology sectors such as artificial intelligence, robotics, green energy, high-speed rail, and pharmaceuticals.
The results of this policy have been significant. For example, when China unveiled its AI chatbot DeepSeek—touted as a competitive alternative to U.S. models—it triggered notable concern among tech investors in Silicon Valley. Meanwhile, American consumers have increasingly gravitated toward low-cost Chinese e-commerce platforms like Shein and Temu, while embracing innovations from China such as TikTok.
President Xi will likely never face domestic backlash over banning American social media platforms the way Trump confronts challenges from TikTok, as U.S. services like Meta and X were never permitted to operate on Chinese soil.
Globally, the impact of the “Made in China 2025” initiative solidified China’s status in key sectors. Today, China accounts for about 60% of the world’s electric vehicles, half of the global ship production, 80% of commercial drones, nearly 90% of solar panels, and between 70–90% of lithium batteries, positioning itself to surpass the U.S. and Europe in next-generation nuclear energy production within the next decade.
This industrial policy also inspired U.S. leaders to adopt measures that would not seem out of place in a Chinese Politburo meeting. The trade war initiated during Trump’s first term highlighted a shift within the traditionally free trade-minded Republican Party toward protectionism. Biden’s administration has followed suit, significantly investing in American clean energy and semiconductor sectors through the Inflation Reduction and CHIPS Acts to decrease reliance on Chinese resources and stimulate domestic production.
Both administrations have sought to impede China’s access to advanced computing chips, recognizing the potential ramifications for its military and technological advancements. After years of American manufacturing being hollowed out by competition from China, Trump contends that tariffs will lure U.S. companies back to the industrial heartland.
“We borrow money from Chinese peasants to buy the things those Chinese peasants manufacture,” remarked Trump’s Vice President, JD Vance, during a recent Fox News appearance, emphasizing the anticipated shift.
Chinese netizens have humorously responded with AI-generated memes depicting weary workers slumped over sewing machines and assembly lines in dilapidated conditions, highlighting the absurdity of manufacturing moving back to the U.S.
However, one must question whether Trump’s brinkmanship is indeed aimed at restructuring global trade. If the U.S. administration intends to bring American businesses home and decouple from China, it’s likely that tariffs will remain a key feature of this strategy. Xi’s reluctance to engage might suggest he is well aware of this reality.
Yet, Trump also understands that China’s sluggish economic growth is heavily dependent on American consumption, and that its overcapacity issues may compel it to search for alternative markets. “China stands to lose on multiple fronts,” warned Yanmei Xie, an independent geopolitics analyst. She pointed out that while China holds trade surpluses with 150 countries, those nations may raise their own barriers to prevent becoming dumping grounds for products displaced by U.S. tariffs.
If President Trump is employing tariffs as leverage for negotiations, Xi may think that Trump, a democratically elected leader facing economic pressures and political challenges, will ultimately have to concede. The recent exemption of smartphone and computer imports from punitive tariffs may be interpreted by Beijing as a sign of American indecision.
Regardless of the outcome, it’s evident that Xi is poised to engage with Trump on these terms, aware that the rules of the game have already been rewritten.
Edited By Ali Musa
Axadle Times International – Monitoring.
