One of the features of Trump is how he seems to view China as not merely a trade rival to be competed with but as an arch enemy to be vanquished, while viewing Russia as a friend. There are many pieces of evidence for this but perhaps the most significant is how he he has imposed massive tariffs on just China (while backing off on most of his tariffs on the rest of the world) while Russia was excluded from all the tariffs. It is a curious reversal of long standing US foreign policy that viewed Russia (as the successor to the Soviet Union) as the enemy symbolizing the evil empire of Communism while Richard Nixon began the policy of engaging with China.
The contrast between China’s and Trump’s policy-making cannot be starker. China is big on long-term planning with its five-year plans, ten-year plans, and even longer-term strategic planning while Trump careens from one policy to another as the whim seems to strike him, reversing himself sometimes within a few days. He wants to somehow hurt China and thinks that high tariffs will damage their economy and cause them to grovel before him.
But it looks like China is calling his bluff and holding firm to its retaliatory tariffs, probably thinking that it can weather this storm and that it is the US that will be hurt and will have to backtrack.
[A]lthough China’s economy has in recent years been beset by its own challenges, when it comes to tariffs specifically, Beijing is unlikely to blink first.
“For President Xi, there is only one politically viable response to Trump’s latest threat: Bring it on! Having already surprised domestic audiences with a forceful 34% reciprocal tariff, any appearance of backing down would be politically untenable,” says Diana Choyleva, founder and chief economist at Enodo Economics, a forecasting firm.
One of the most helpful factors in Beijing’s favour is the fact that the US is far more dependent on Chinese imports than China is on the US.
The main items that the US imports from China are consumer goods, such as smartphones, computers and toys. Last week, analysts at Rosenblatt Securities predicted that the cost of the cheapest iPhone available in the US could rise from $799 to $1,142 – and that was when Trump’s China tariffs were just 54%. “Trump cannot credibly deflect blame on to China for these economic hardships,” Choyleva says.
In contrast, the goods that China imports from the US are industrial and manufacturing supplies, such as soya beans, fossil fuels and jet engines. It is much easier for price increases in these commodities to be absorbed before a consumer gets their wallet – or in the case of China, their smartphone – out to pay.
Since Trump’s first trade war with China during his first term, China has been shifting its trade elsewhere and so seems ready to deal with Trump’s actions.
Since Trump’s first trade war with China in 2018, China has ramped up trade with other countries, making it less dependent on the US. Between 2018 and 2020, Brazil’s soya bean exports to China increased by more than 45% compared to the 2015-2017 average, while US exports declined 38% over the same period. China is still the largest market for US agricultural goods, but the market is shrinking, hurting American farmers. In 2024, the US exported $29.25bn of agricultural products to China, down from $42.8bn in 2022.
China’s leader is now touring south-east Asia, shoring up trade deals with other nations in its shift away from the US. They are clearly using carrots to bring other countries closer to it while Trump believes in using sticks to punish them if they do not bow to his will.
Xi Jinping’s tour of south-east Asia this week is probably intended to “screw” the United States, Donald Trump has suggested, as Xi embarks on a five-day tour of some of the nations hardest hit by Trump’s tariffs.
China’s president visited Hanoi on Monday, where he met the leader of Vietman’s Communist party, Tô Lâm, called for stronger trade ties and signed dozens of cooperation agreements, including on enhancing supply chains, before heading to Malaysia.
….Vietnam, a major industrial and assembly hub, is among countries in south-east Asia that are reeling from some of the most punitive of Trump’s so-called “Liberation Day” tariffs, hit with a rate of 46%. The US is Vietnam’s main export market, for which it is a crucial source of everything from footwear and apparel to electronics.
…In Malaysia on Tuesday, the Chinese leader said he was looking forward to “further deepening the traditional friendship” between the two countries.
…China-US tensions appear to have shifted some trade war battles to other fronts. Xi has sought further US-excluded cooperation with the EU, and in Latin America the US is pushing governments to reduce their financial ties with China.
The Trump administration also seems stuck in the mindset that China is a backward country. JD Vance has angered China by referring to Chinese peasants.
Speaking to Fox News last Thursday, Vance defended President Donald Trump’s market-hammering tariffs and railed against the “globalist economy.”
“What has the globalist economy gotten the United States of America? And the answer is, fundamentally, it’s based on two principles – incurring a huge amount of debt to buy things that other countries make for us,” Vance told news show “Fox & Friends.”
“To make it a little more crystal clear, we borrow money from Chinese peasants to buy the things those Chinese peasants manufacture.”
…Clips of Vance’s interview made their way to the Chinese internet this week, drawing an intense backlash in a country where factory floors are lined with industrial robots, cities are embracing homegrown electric vehicles and remote counties are connected by a nationwide web of high-speed railways.
“This true ‘peasant’ who came out of rural America seems to have a lack of perspective,” said Hu Xijin, the influential former editor-in-chief of state-run tabloid Global Times, in a post on microblogging site Weibo. “Many people are urging him to come and see China for himself.”
A hashtag on Vance’s remarks became the top trending topic on Weibo on Monday night. By Tuesday afternoon, it had racked up 140 million views.
“Look, this is their true face — arrogant and rude as always,” said a comment with 2,900 likes.
“We may be peasants, but we have the world’s best high-speed rail system, the most powerful logistics capabilities, and leading AI, autonomous driving, and drone technologies. Aren’t such peasants quite impressive?” another said.
AI-generated memes are now trolling the US.
The Trump administration is still under the impression that China cannot compete with the US in the modern global economy, because all they can do is low-skilled manual work. Hence, according to Trump’s trade secretary, it should be easy to bring manufacturing of high-tech goods back to the US which has the skilled workers.
“Remember the army of millions and millions of human beings screwing in little screws to make iPhones? That kind of thing is going to come to America,” Lutnick said.
“It’s going to be automated and great Americans – the tradecraft of America – is going to fix them, is going to work on them.”
But that has not been true for a long time, as even Steve Jobs emphasized back in 2010.
Jobs, however, was adamant as far back as 2010 that such a scenario could not come to pass. Axios reported on Tuesday comments Jobs made, in Walter Isaacson’s biography, during conversations with Barack Obama, that the US lacked the quantity of highly trained personnel the company would need.
Apple had 700,000 factory workers employed in China, Jobs said, and that was because it needed 30,000 engineers on-site to support those workers.
“You can’t find that many in America to hire,” he said.
More recently, Cook, whom Trump memorably referred to as “Tim Apple” during his first term, was just as forthright, Axios reported. Cook told Fortune in 2017 that companies like his relied on countries such as China not for cheap labor, but the quality of trained employees.
“The reason is because of the skill and the quantity of skill in one location, and the type of skill,” he said.
“[Our] products require really advanced tooling. The precision that you have to have in tooling, and working with the materials that we do, are state-of-the-art, and the tooling skill is very deep here.
“In the US you could have a meeting of tooling engineers, and I’m not sure we could fill the room. In China you could fill multiple football fields.”
This idea that the US is the country that innovates while other countries, especially Asian ones, are merely copiers producing inferior products has been around for a long time. I recall how back in the 1960s, Japan’s auto, electronics, and household appliances were sneered at as shoddy. And it was true at the beginning but they quietly and quickly got much better while the US stagnated, fell behind, and eventually many American companies either went out of business or are struggling. The same thing happened later with South Korea and China and is now happening with Vietnam. People and business who are new to a field begin by copying the existing masters to learn the skills before then branching out. This is true for artists as well as for businesses. They do not stay as novices forever, however, and treating them as such is a mistake.
China is also doing other things in retaliation such as walking away from the TikTok deal.
Beijing’s extraordinary move last week to walk away from the White House’s TikTok deal as leverage in an escalating trade war defies the norms of economic negotiations — but follows President Donald Trump’s own trade playbook.
The White House last week had finalized a pact to spin the popular video app’s U.S. operations into a new company owned and operated by a majority made up of American investors, according to two people familiar with the deal granted anonymity to speak candidly. The deal was set to be announced just days before a Saturday deadline mandating the app’s Beijing-based owner, ByteDance, sell to a majority of non-Chinese companies, or TikTok would go dark in the United States.
Then it fell apart.
…Beijing is “really, really good at identifying things that don’t cause them pain, but do cause you pain. And this is a classic case because I think they would prefer not to sell TikTok anyway,” said Bill Reinsch, a top Commerce official during the Clinton administration who is now a senior adviser at the Center for Strategic and International Studies. “This is a convenient way for them to both send the signal to us that they are not without leverage and to maintain control of TikTok for themselves.”
Beijing’s strategy is flipping Trump’s own playbook on its head.
Businesses and countries need stability in order to make strategic long range plans. Which country or nation sees the US as stable anymore? The main thing that the US still has going for it is that it is still the largest economy (though just barely), its currency is still used as the reserve currency by most countries (though it is losing ground), and it is resting on its old reputation for stability. We may well see Trump effectively dismantling all these things in short order.
I expect Trump to look for a face-saving way to back down in his tariff war with China. Whether they will let him down gracefully is unclear. Chinese policies are not driven by fits of pique but on long-term strategic thinking. If they think that they can achieve their goals by letting Trump down easy, they may well allow it to happen.
China has raised vastly more citizens out of poverty than the US. And, unlike the US, dragged down by short-term capitalist thinking, China is investing heavily in infrastructure and automation.
We are also dealing with a generation (including Xi) that grew up during and through the cultural revolution. A Chinese-American CEO once told me a bit about what that was like, and ended with “Americans say they want limited government but they have no idea what any of it means.” When you lose millions of your fellow citizens to purges and starvation, you probably have a better idea what “hard times” means than the typical American-born. For that matter, all of the would-be immigrants from Central America know “hard times” thanks to CIA interference in their politics. “You may have to tighten your belt” means something very different to someone who survived the cultural revolution.
The Chinese are being very judicious in their responses, and are being quite strategic. Frankly, I imagine there are intelligence officers over there, talking with economists and data analysts, gleefully presenting suggested measures against specific targets. Brazil just stepped in and sold China the amount of soy beans the US usually does, at the same price (no tariff) that this hurts US “red states” is no accident. The EU is apparently exploring some trade deals with China (no tariff) on minerals, argricultural products, and oil. It’s no coincidence that those are all “red state” products.
My favorite bit of trolling is that China is apparently setting up a “come shop in China” system where a US passport holder can spend 3 days shopping without tariffs or a pre-arranged visa. That’s actually a huge thing, and if it’s real, I will probably catch a flight to Beijing to see how many dumplings I can eat.
Marcus: My favorite bit of trolling is…
Trump plays Tic-tac-toe. Xi plays Go.
i look forward to one day investing my retirement in chinese bonds
I came across an interesting video about Chinese manufacturing. It was uploaded a week or so before ‘liberation day’. I think it’s worth watching. Here’s the description.
“China’s industrial proficiency is shocking to manufacturing experts. Their degrees of automation, of engineering expertise, and supply chain domination have no close peer across other modern economies.
China’s latest innovation is “dark factories”, massive production centers that produce complex products with no humans involved. In an absurd example, a Chinese factory in Guangdong builds robots, exclusively by other robots.
Also astonishing is these factories’ capability to manufacture highly customized product lines, fast, and at low minimum order quantities.
Chinese smart manufacturing is likely the largest in the world, today. It is growing at a CAGR of over 18%, and will more than double in size by 2030.
Deep challenges remain for other economies to challenge China in smart manufacturing. Chinese Artificial Intelligence systems are already in place, cost little, and its engineers are strongly proficient in their applications. Chinese electricity costs far less than peer countries. And, here again, China’s monopolistic control over the global raw materials and logistics chains is probably an insurmountable hurdle for North America, Europe, and other Asian countries.”
Trump is following in the footsteps of Mao.
https://www.theguardian.com/commentisfree/2025/apr/14/china-donald-trump-mao-zedong
That explains why he wants manufacturing sweatshops in America. No stinking academicals needed. The USA will be the next China.
I think he angered them by referring to them as peasants.
China has banned the import of US beef and will instead be buying it from Australia.
Trump has really been helpful to all those Republican farmers…
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Hmm, is there another very big country that may replace China as customer?
Somebody should call Trump and suggest US try sell the beef to India instead. Since this administration has zero feasibility-checking before press conferences it would be hilarious. Even more so if Trump calls Modi on the phone and suggests it!
Trump seems to be blinking first in trade war with China.
Phil Moorhouse:
“Trump’s Chinese Trade War Not Going Well”
.https://youtube.com/watch?v=8DhzzcbdCoM
In 1931, Pearl Buck (a daughter of missionaries in China) wrote a novel, called “The Good Earth” that was about a fictional village of peasants in rural China. This novel was very popular in the US in the 1930s. Maybe this was the most recent news about China to reach Appalachia? When JD Vance grew up there and went to Harvard, he might not have studied anything at all about China since 1931.
By having contempt for his own region, Vance might feel he is being fair to ALSO have contempt and outdated information about every other country in the world.
Clearly, Vance was selected for his subservience to Trump, not for independent thinking. And not for a fair or informed view of anything.
Sad!
Its still curious to me what the end goal is (besides the enrichment of the people involved)
1. People can understand bring back manufacturing jobs -- And putting tariffs , could in theory help (however unfeasible the end goal is) -- But then what are the trade deals for ? If they do make a deal for China to buy more soy beans or oil or iphones , how does that bring back the manufacturing jobs ?
2. if on the other hand its bring down the trade deficit , then why the focus on bringing back jobs. Reducing the deficits only helps companies that export and probably some increase in tax collected (but isnt he also going to bring down the tax rate !)
If i wanted to reach Republican voters I’d probably use that -- that the deals and flexibility Trump shows will in the end not bring back jobs -- That may get through to Trump voters -- the “tariffs bad” cannot because every other country counters tariffs with tariffs. The arguments about oh America cant bring back low paying manufacturing jobs or America cant build the expertise overnight just wont work -- People only see other countries have overall prospered from where they were (obviously!) and a lot of Americans havent -- Technical arguments about how its due to rich capturing the government simply do not work for Republican voters (unless that rich person also supports wokeness).
If the USA wants to constrain China (which one would expect under any administration), alienating Vietnam is a particularly stupid move: there is a depth of historical suspicion of China in Vietnam, going back to the first Vietnamese struggle for independence -- from China -- in the 10th century CE, but greatly reinforced by the unsucessful Chinese invasion of Vietnam in 1979.
There are lots of aspects here:
-- As noted above, China may have started as just a source of cheap labour, but they’ve had time to train up new generations of engineers of their own since then.
-- On top of that, China has had the ability to ‘generation-skip’ manufacturing processes. Their factories are more automated now because they’ve been able to build new ones with modern techniques. It’s just like the way a number of smaller, poorer countries went straight from ‘no national phone system’ to ‘cell phones everywhere’: when you don’t have massive amounts of existing infrastructure to maintain, you can just build everything to modern efficiency to start with.
-- And, of course, there’s the way that the U.S. has been actively destroying its own skilled workforce for generations now. From general cultural anti-intellectualism (which China is no stranger to, and has had to deal with the results of), to active undermining of the public education system (much of that for purely racist reasons, in that many Americans would happily destroy something they need themselves just to ensure no black people can be helped by it), the U.S. just simply doesn’t have the necessary number of people at large scale anymore, as Jobs pointed out in your quotes.
There’s no magical fix for this; it took two or three generations to get here, and even if Trump and his ilk were stopped from accelerating the downward spiral today, it’s going to take at least two or three generations for the U.S. to get back to anything approaching parity on this. Heck, it would have taken two or three generations if Trump had never made it into office: now it’s going to take even longer because a number of the necessary programs are going to need to be rebuilt from scratch.
jenorafeuer @ 12
America’s loss will be the China’s and the European Union’s gain. I would prefer it to be mostly Europe so the third world nations do not perceive the Chinese one-party state as the unchallenged role model.
The other BRIC countries are also cathching up, with wildly varying levels of democracy.
Actually, since I posted the above, I saw this article:
Vox: Manufacturing jobs are never coming back
Basic summary: heavy investment in manufacturing jobs is just something that isn’t compatible with being a rich country. It’s not just ‘the jobs are cheaper overseas’; it’s also ‘we have access to more automation so we don’t need as many humans to do the jobs’.
The paper they’re quoting breaks down industries down into three categories, and has plots of how the shares of employment in each category change as the country gets richer (using GDP per worker as a proxy for ‘richer’).
-- Primary/Resource industries: downward slope as the country gets richer; better automation means fewer people are needed to run farms and the like while producing the same amount of food, if not more.
-- Secondary/Manufacturing industries: inverted V as the country gets richer; increasing up to a point as automation and tools mean people don’t need to toil on farms as much, freeing them up to work here, then decreasing as the better tools produced at this level require fewer people in these dangerous jobs. China has basically just hit the peak here recently.
-- Tertiary/Service industries: upward slope as the country gets richer; fewer people are needed to do the necessary underlying work to keep up the standard of living, so people do other things to fill their time or support others.
Basically, by this work, the only way to bring manufacturing jobs back to the U.S. would be to make the average American dramatically poorer.
Unfortunately, Trump doesn’t seem to consider that a problem.
@10 Deepak Its still curious to me what the end goal is (besides the enrichment of the people involved)
You’ve answered your own question. There is no end goal beyond that. There are secondary goals, namely, those things they need to do in order to stay in power to maintain the grift, but that’s it. Do not look for logic or consistency outside of the above. For example, the big thing in today’s news is Mussolini Wannabe trying revoke Harvard’s tax exempt status because they refuse to cave to his demands, chief among them the policing of discussion regarding Israeli policies and actions. He falsely tries to frame this as antisemitism. If you focus on the situation at face value, you’ll go crazy trying to make sense of it. In reality, he doesn’t give a rodent’s posterior about the Jewish people. What he does care about is that a huge portion of his base is made up of conservative evangelicals, many of whom subscribe to an end-times prophecy regarding the state of Israel that they would like to see unfold. Thus, if he can shake down a university or inflict his personal revenge on them for not bending the knee while simultaneously riling up his base, that’s a double win for him.
I’m sure others have noticed the double-speak. For example, “DEI” is about as a big of scary monster as there is among conservatives right now. They can’t say enough bad about it. Yet, one of the things they have demanded from the Universities is that the schools guarantee “viewpoint diversity” among faculty and course offerings. Normal people would look at that and think “But the D stands for Diversity” and get confused. But again, these self-seeking barbarians don’t care about diversity. What they care about is a guarantee that their viewpoints will hold a mandatory place, and thus help perpetuate their grip on power, no matter whether their ideas have been shown to be incorrect or deleterious to a healthy society.