The News
China and the US doubled down on tariffs Wednesday: Beijing announced an additional 50% duty on all US goods, raising the total to 84%, prompting US President Donald Trump to boost the charge on all Chinese imports to 125%.
China’s Commerce Ministry said the country “will firmly defend its interests, multilateral trade system and international economic order.” Beijing also barred six US firms from doing business in China.
China’s new duties take effect Thursday: The move is set to prolong the global economic volatility that Trump’s “Liberation Day” tariffs kickstarted, with analysts questioning whether there is any immediate end in sight.
SIGNALS
Xi Jinping has little choice but to retaliate
Chinese leader Xi Jinping’s self-built image “as a defiant strongman helming a powerful country” makes any perceived concession or capitulation to Washington politically contentious, a former US policy official told The New York Times. Rather, in doubling down, Xi is signaling a prioritizing of national pride and domestic growth: “What we are seeing is a game of who can bear more pain,” a Peterson Institute analyst told the BBC; Chinese exports to the US make up about 2% of its total economic output, which Beijing may feel able to absorb. Beijing’s vow to ‘fight to the end,’ however, could lead into “proper doom loop territory” as an escalating trade war between the world’s two biggest economies raises the probability of a global recession, Lewis Goodall said on News Agents.
Beijing is carefully controlling Chinese public reaction to US tariffs
Since US-China relations began to deteriorate in 2018, Beijing has increasingly utilized anti-American messaging, a 2024 Wilson Center report found. State censors are even allowing some Chinese netizens to reference the Cultural Revolution — a taboo topic under Xi Jinping— to mock the “chaos” of US politics under Donald Trump, The Economist wrote. Beijing is curating public reaction to Trump’s tariff blitz, Dao Insights reported: Platforms like Weibo, Xiaohongshu, and WeChat all show posts criticizing the US as trending — including claims that America is begging Europe for eggs — while blocking references to the 104% tariff rate facing Chinese exports to the US. “In Chinese people’s genes, we never fear any risks,” one state newspaper wrote.
Trump’s trade war could go China’s way
If “a real trade war is a contest in ability to endure pain,” Foreign Policy wrote, then Beijing will probably win: The Chinese public is more able to endure a trade war than are Americans, the majority of whom already think the tariffs are a bad idea. The yuan’s undervaluation, meanwhile, continues to strengthen China’s export competitiveness, one analyst wrote. Beijing can also redirect its exports to other markets, while the government’s support for technology and other domestic industries, as well as China’s huge manufacturing capability, mean it can make up for a sudden restriction in US goods and services. By contrast, the US will struggle to replace foreign supply chains, especially for defense and technology manufacturing, one analyst wrote.