US China trade conflict: Why does Beijing not give in

US China trade conflict: Why does Beijing not give in

What was originally intended as a historical trade war that triggered, etc. President Donald Trump against a number of countries, has initially focused on a single goal: china . On Wednesday, Trump announced a three -month suspension of all "mutual" tariffs that had previously come into force - with an exception that deepens the confrontation that aims to undermine the trade between the two largest economies in the world.

rising customs tariffs and economic tensions

The speed at which the situation has escalated is impressive. Within a week, Trump's tariffs on Chinese imports have risen from 54 % to 104 % and now to 125 % - figures that were already available for existing taxes that were imposed before Trump's second term. China also reacted in a similar way and increased the additional, retaliative tariffs to all US imports to 84 %.

This confrontation leads to a historical disruption that will not only cause pain intertwined with each other, but also adds considerable tensions in its geopolitical rivalry. "This is probably the strongest indication that we have seen that we are heading for tough decoupling," said Nick Marro, chief economist for Asia at Economist Intelligence Unit, and spoke of a scenario in which the two economies have practically no trade or mutual investments.

China's point of view and future strategies

Trump seems to be the same relief as to give China the same relief as other nations, to link Beijing's quick reaction. He commented on reporters on Wednesday with the words: "China wants a trade, they just don't know exactly how to proceed." But the view from Beijing appears dramatically differently.

China's leader Xi Jinping, the most powerful leader in the country for decades, does not see an option for his country, simply to be capitulated, which it sees as a "one -sided intimidation" of the United States. Peking has publicly mobilized passionate nationalism for its retaliative measures - part of a strategy that has been prepared quietly for over four years since Trump was recently in office.

Although China has long said that it would be in conversation, Trump's quick escalation for Beijing seems to confirm that the United States does not want it. According to experts, China is willing to strike back, but also to use Trump's trade riots to strengthen his own position.

The challenges of both economies

"XI Jinping has long made it clear that he would expect China to enter into a phase of long-lasting fights with the USA and their allies. China had to prepare for this, and they have done this extensively," explains Jacob Gunter, main analyst of the Merics Themkfabrik in Berlin. "Xi Jinping has accepted that the glove was thrown and they are ready to fight."

whether Trump would have suspended his so -called retaliation tariffs in China alongside other nations remains an open question if Beijing had not reacted so quickly. Canada had also retaliated, but was included in the suspension, which the general fee of 10 % imposed last week.

Nevertheless, Trump, whom the White House described this week as a "person with a steel back", sees itself towards a war of wear and tear, together with XI, who has the potential, an unbalanced but severely integrated trade relationship in the scope of about half a billion dollar.

consequences of the trade crisis for the global economy

China was the global production location, where automated and state -of -the -art production chains are increasingly producing everything from household goods to shoes to electronics, raw materials for construction, devices and solar panels. These factories satisfied the demand for American and global consumers for affordable goods, but contributed to an enormous trade deficit and a feeling among some Americans, including Trump, that globalization has stolen US productions and jobs.

Trump's increase in tariffs to over 125 % of the USA in the United States by more than half. Many goods from China will not be able to be replaced quickly, which could potentially drive prices for American consumers over the years. Analysts from JP Morgan said that this situation could mean a tax increase of around $ 860 billion for the Americans before it comes to substitutions.

In China, a broad circle of suppliers will probably see that their already small margins will be completely wiped out, while a new wave of efforts to build factories in other countries will be started. According to Victor Shih, director of the 21st Century China Center at the University of California San Diego, this could lead to "millions of people unemployed" and there is a "wave of bankruptcies" in China. In the meantime, US exports to China could "almost fall to zero", he added.

The resilience of China and political strategies

"But China can do this situation much better than American politicians," he said. This is also due to the fact that the leading politicians of the China Communist Party do not have to fear a rapid return of voters and opinion polls. "While Covid switched off the economy (which was to) immeasurable unemployment and suffering - no problem."

Beijing is also convinced that it can survive the storm. "We are prepared in response to the US tariffs and have strategies. We have waged a trade war with the USA for eight years and gained extensive experience in these fights," emphasized a comment on the front page of the state organ People’s Daily on Monday.

It was pointed out that Beijing could make extraordinary efforts to increase domestic consumption that has long been weak and to introduce further political measures to support its economy. "The plans for the reaction are well prepared and rich," it said in the comment.

China's preparations for a trade confrontation

Beijing has also had discussions with countries from Europe to Southeast Asia to expand the trade cooperation and outdo the United States by gaining American allies and partners who are frustrated by the constant back and forth in the trade war.

has prepared for trade friction from the United States since Trump's first trade war and its campaign against the Chinese technology giant Huawei, which for Beijing produced vigilance that its economic rise could be at risk if it is not prepared accordingly. "The Chinese government has been preparing for this day for six years - they knew that this was a possibility," said Shih in California, who added that Beijing supported countries to diversify their supply chains and to cope with various economic challenges in advance.

China's stronger position in global trade

Today China is much better equipped to survive a wider trade conflict. Compared to 2018, the state has expanded its trade relationships with the rest of the world and reduced the proportion of US exports from around a fifth to less than 15 %. In addition, its manufacturers have built extensive companies in third countries such as Vietnam and Cambodia to benefit from possibly lower US tariffs.

china has also expanded its supply chains for rare earths and other important minerals, improved its manufacturing technology through AI and humanoid robots and increases its advanced technological skills, including semiconductor. Since last year, the government has also tried with different success to address problems such as weak consumption and high public debt.

"(China) are considerable, but in the context of a comprehensive struggle they are manageable. The United States will not manage to put China's economy to the brief of destruction," said Scott Kennedy, Senior Advisor at the Center for Strategic and International Studies in the USA. "As much as Washington does not want to admit it, when China says that China cannot be curved economically, they have a point."