Big Take Asia
China’s New Game Plan for Dealing With Trump Tariffs
Feb 11, 2025
Shuli Ren, a Bloomberg Opinion columnist focused on China's economy and politics, dives into China's nuanced response to U.S. tariffs imposed during Trump's administration. The discussion reveals how China has adopted a more strategic and less confrontational approach, drawing parallels with Tai Chi. Ren highlights the long-term economic strategies of China versus the U.S.'s short-term focus and addresses the potential consequences of a renewed trade war. He also examines Xi Jinping's steady demeanor and Beijing's efforts to strengthen alliances amid rising tensions.
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Quick takeaways
- China's economic reliance on exports amid internal challenges like high youth unemployment limits its ability to retaliate against U.S. tariffs.
- The current trade conflict sees a shift in strategy from both nations, with China opting for calculated responses rather than aggressive tariffs to sustain negotiations.
Deep dives
China's Economic Position in Trade Wars
China's current economic situation differs significantly from its position during the first trade war in 2018. The country is now more reliant on its exports and faces considerable internal challenges, including high youth unemployment and a weakened consumer base. This reliance on exports makes China more vulnerable, as it cannot afford to absorb a significant drop in trade with the U.S. Additionally, while the 2018 trade war had a strong consumer base to support its economy, current conditions suggest that consumer spending has diminished, limiting China's ability to retaliate effectively.
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