Perhaps Trump believed that, as the US Treasury Secretary Bessent put it, countries would rush to compromise with the US government early on, after which Trump would ease some pressure and see how much more he could squeeze out. It cannot be denied that many countries did indeed plan to do just that.

However, what happened next caught Trump off guard. The US stock market plunged for two consecutive days, with indices dropping by about 10%, resulting in a market capitalization loss of $6.4 trillion. On April 4th, the Chinese government announced substantial retaliatory measures, with 11 arrows firing back, imposing a 34% tariff on all US goods, causing another sharp drop in the US stock market on the same day.

In my view, this is precisely the retaliatory opportunity that China has been waiting for, and the time has come.

Trump played all his cards on tariffs. This is not only his weakest moment but also the best opportunity for a counterattack.

Since 2018, China has been preparing earnestly to contend with the US. Throughout this process, the US has been making moves, and China has essentially figured out the tactics. Trump’s “Liberation Day” action on April 2, 2025, has laid all his cards on the table. In my opinion, he is not prepared for serious follow-up actions and is just following the same old routine, waiting for other countries to compromise. At this moment, when Trump is at his weakest, China’s strong retaliatory measures are absolutely beyond his expectations and are a checkmate that the US finds difficult to deal with.

The fundamental reason for America’s weakness

The fundamental reason for America’s weakness lies in the decline of its manufacturing sector. The belief that “imposing tariffs can promote the development of American manufacturing” is merely a hollow idea for those who do not understand the actual operations of businesses. Balaji Srinivasan, a prominent Indian-American Silicon Valley investor, serial entrepreneur, technology expert, and futurist, whose thoughts and viewpoints wield significant influence in the tech industry, commented that a symptom of America’s deindustrialization is that many commentators have never truly managed a physical enterprise.

Most American cars heavily rely on foreign sources for their parts.

An American company imports parts worth $1 million, produces products selling for $1.2 million, and makes a gross profit of $200,000. Faced with a 30% import tariff, it will not shift to local production of components because “it’s like being asked for the equivalent of planting a maple tree when all you need is a little maple syrup” and “establishing a screw factory is much more expensive than paying high tariffs for foreign screws.”

In this scenario, the company will respond in two ways: the first is to opt for lower-priced components at $750,000, still selling the product for $1.2 million, hoping customers will accept it; the second is to pay the $300,000 tariff, sell the product for $1.5 million, hoping to make sales, and in the meantime, borrow money to pay the tariff.

During the McKinley era, the United States had the most efficient workforce and industrial development system globally, making the argument for developing manufacturing through high tariffs plausible. Nowadays, the efficiency of American workers is extremely low, and imposing tariffs cannot solve this problem. Trump mistakenly believed he could emulate McKinley’s success, which is a misguided approach.

China’s Confidence in Counterattack

China’s counterattack is built upon the foundation of having the world’s most powerful manufacturing capabilities, giving them the confidence to confront tariffs head-on, with businesses not compromising and the yuan not devaluing.

After multiple rounds of US tariff impacts, domestic Chinese businesses have formed a consistent expectation: to raise prices in response to US tariffs. US buyers demand that Chinese sellers bear additional tariffs, but Chinese businesses adjust their prices accordingly. If the US imposes a 54% tariff and the US buyer wants the Chinese seller to share half, the seller will raise prices by 27%, or they could choose to bear the full amount and increase prices by 54%. Even if orders are canceled, there is no way around it; losing money on deals is not an option.

The reality is that China’s manufacturing industry has no global rivals; they are essentially competing against themselves. American buyers are free to look elsewhere, but if they could find suppliers abroad, they would have done so already.

For instance, many American and foreign companies manufacture in China and export to the US, so their operations are impacted by tariffs, with Apple being one of the most affected. These companies also consider relocating their production lines. After years of practice, the situation has become clear: the transition is not as straightforward. Even if they are determined to move, they would still need cooperation from the Chinese supply chain.

On the currency front, China has gained experience in dealing with the United States as well. In 2018, when Trump imposed tariffs on China, the Chinese yuan devalued, effectively lowering prices of all goods for the US market, thus alleviating some of the pressure on buyers and sellers to negotiate tariffs. Following Trump’s recent tariff hikes, the Chinese yuan did not experience significant devaluation; instead, it saw a 1000 basis point increase, indicating a clear goal of stabilizing the exchange rate. Some suggesting a 20%-40% devaluation of the yuan to counter US threats are simply speaking nonsense. The yuan will not devalue just because the US threatens substantial tariff increases; it is already significantly undervalued and will transmit price pressures outward.

The Impact of China’s Tariffs on US Goods

Let’s discuss the impact of China imposing a 34% tariff on all US goods. In 2024, US exports to China totaled $143.5 billion. Chinese tariffs on all American goods will also pose a significant challenge for US companies. The US stock market is under pressure as the AI bubble has deflated, teetering on the edge of a bear market. The stock market’s impact on the economies of China and the US differs significantly. Both the US economy and Trump cannot afford a stock market crash or prolonged downturn.

Recently, the price of gold has surged past $3000, dealing a significant blow to the long-term credibility of the US dollar. Global central banks have started to make assessments on the dollar and are increasingly adding to their gold reserves. The pressure on US bonds is also substantial, with interest expenses totaling $480 billion in the first five months of the 2025 fiscal year (starting from October 2024). Over the next 10 months, the US government will need to sell over $1 trillion in bonds each month to meet obligations such as repaying principal, paying interest, and addressing the fiscal deficit. Following the sharp drop on April 4th, the Nasdaq index has fallen by 23% from its peak, entering a bear market. These conditions are placing significant strain on the US economy.

At this critical juncture, Trump is engaging in tariff extortion against all countries worldwide. The strongest player, China, has already retaliated firmly, while other powerful and experienced opponents are also taking action; countries like Canada and the EU will not be as easy to deal with as smaller nations.

Economists are not optimistic about Trump’s tariff actions, and this assessment does not require a high level of expertise. The deep-rooted issues in the US manufacturing sector cannot be solved simply by imposing tariffs; it requires meticulous industrial planning, patient strategic execution, in essence, learning from China.

Trump’s original intention was not to initiate an uncontrollable global trade war; he does not have such a contingency plan. The current US administration has displayed a noticeable lack of discipline and has made several errors. Trump’s strategy is to apply maximum pressure, force opponents to compromise, and negotiate on his terms, expecting to gain advantages through his so-called “art of the deal.”

China is prepared while Trump is not; our side is patiently waiting for the right moment, while the opponent is launching aggressive attacks from all directions. China’s tariff counterattack has already dealt a blow to the US stock market, targeting Trump’s vulnerabilities at the most opportune moment will undoubtedly yield encouraging results.

The post China Waited to Strike Back, Now is the Time first appeared on China Academy.

Professor Zhang speaking to Serbian journalist Zikica Stevanovic

Insajder TV:
First of all, Professor Zhang, thank you very much for your time. Donald Trump’s return to the White House has brought the simmering U.S.-China trade war to the fore. Washington imposed new tariffs on the Chinese goods and Beijing retaliated the same way. The current relations between the U.S. and China are strained right now, but what’s the future of relations between two of the most powerful countries in the world?

Zhang Weiwei:
In the first place, this so-called tariff war, in fact, is not a big deal for China. We experienced Trump 1.0. He launched his trade war with tariffs on China, but we made a rough calculation that about 90% of the increased tariffs, in fact, were paid by the American consumers or companies. So the second one will be very similar. As you say, China retaliated. It seems even Canada and Mexico want to retaliate. So I think the United States will face more trouble. This whole scheme may backfire in the end; in the case of China, it’ll backfire for sure.

Insajder TV:
But the relations between the two countries are not as good as maybe a third party would like to see them. Let’s say, from Serbia, you’re looking at the two most powerful countries in the world. Where do you see these relations in the future?

Zhang Weiwei:
In fact, if you look at the overall approach Donald Trump takes with global affairs, it reminds me of the remark made by Henry Kissinger, or allegedly made by Henry Kissinger. He said, it’s dangerous to be the enemy of the United States, but it’s fatal to be the ally of the United States. His overall strategy is withdrawal; he believes the United States is reaching out too much beyond its strengths. So he’s withdrawing to America. Now he starts with his allies, Canada, Denmark, and Greenland. China is in a much safer position. He said that if China and the United States can cooperate, it’ll solve all the problems in the world, he will visit China within the next 100 days. So we wait for him.

Insajder TV:
But if China and America don’t solve the problems they have right now, what consequence Professor do you see for the world itself?

Zhang Weiwei:
For China, it’s a huge, I think a bonus for the world and for most countries, because we believe in win-win. If there are disputes or difficulties, we can hold talks and negotiations. We find the solutions that both sides, three sides, or other parties will win. For the U.S., it depends on how you view it. I’ll give an example: if you look at China’s relations with Southeast Asia and U.S. relations with Europe and the Balkans, China respects Southeast Asia. Don’t forget, Southeast Asia is called the Balkans of Asia, with different ethnic groups, different languages, different religions, and different political systems. But they formed what’s called ASEAN. China respects ASEAN’s independence, neutrality, nuclear-free zone, and we develop vigorous trade relations with ASEAN based on win-win principles. As a result, China and ASEAN have achieved four decades of peace, development, and prosperity and win-win. This is now the world’s largest free trade zone, unlike the United States’ relationship with the European Balkans.

You see the problem with NATO. The philosophy is “keep America in, keep Russia out, keep Germany down, and divide and rule.” Old Europe and new Europe, all kinds of problems. Chinese philosophy is “unite and prosper”. U.S. philosophy is “divide and rule”. It’s totally different. So the world will eventually move more in the direction that China represents, I believe.

Insajder TV:
But what does the U.S. need to do to become a good partner for China? Do you see anything that the United States should do right now?

Zhang Weiwei:
Basically, the United States should reform its behavior in international affairs. And we give some credit to Donald Trump. He said he will no longer fund USAID, etc. In other words, this promotes color revolutions, creating problems and troubles in so many parts of the world. Indeed, the United States has also suffered so much. Donald Trump made the calculation that the United States became poorer. He always says America is a failing nation; we waste so much money on wars and destruction, unnecessary ones. I think, hopefully, the U.S. will withdraw. It’s about kind of unnecessary intervention in other countries and trying to build America; it should build its own country better. You look at U.S. infrastructure; as Donald Trump said, for the best infrastructure, you have to go to China, not America. The United States is more and more like a developing country. Actually, I share Donald Trump’s view, and I share that it should focus on itself, domestic economic development, and also reforming its political system.

Insajder TV:
China’s rise in recent decades is evident, but no country is perfect. What challenges do you see in China? China’s domestic, political, and social life?

Zhang Weiwei:
Actually, as you said, all countries have their domestic challenges and other problems, this and that. China is a very special country. It’s a vast country, the size of a continent with 1.4 billion people. If you look at the European continent, on average, a European country is a country with a population of roughly 14 million. So China is the size of 100 average European states put together; you can imagine the kind of challenges we are faced with. Yet on the whole, the Chinese philosophy is each and every challenge also presents opportunity.

I give an example: when Donald Trump launched a trade war against China, it’s a challenge. Many companies suffered from that, but we eventually coped with it. For instance, the tech war launched by Donald Trump on China mainly had to do with chips. So now we produce our own chips in large amounts. Last year, China became the world’s largest producer and exporter of trade. Basically, low-end chips are all done by Chinese companies; middle and high-end, China’s coming, represented by DeepSeek and more. Both the trade war and tech war became failures. They made China stronger. We have many other challenges. For instance, we are talking about this AI revolution. It’s a new challenge for Chinese education, for China’s jobs, as with any other countries. So we are following this. We’re trying to find out how to turn these challenges into opportunities.

Insajder TV:
Among other things, that China’s economic opening to the world led it to the position where it is now, the second biggest economy in the world. Some lawmakers from Shanghai proposed some weeks earlier that China may should have to open its internet to the world in some places like free trade zones, universities, et cetera. Do you see that as an important step, if that happens, to the additional growth of China? Is that something that is maybe naturally in the future to happen?

Zhang Weiwei:
When the United States was very strong in the internet business, China was very weak at that time. And China decided to build this called wall against or prevent American companies from really flooding into the Chinese market. So many people said you need this firewall. You should tear down this wall. But in the end, you find these walls are at least temporarily necessary, because with this kind of temporary protection, the Chinese internet industry grows up rapidly.

Now it’s on the part of the United States, if not more developed. Compared with Europe, there’s no wall. In the end, the European Union even did not have a search engine of its own. China has all the equivalent of U.S. apps, but today, if you look at the major apps used in the United States, TikTok, Shein, Temu, and more, are from China. And concerning this wall, interestingly, because of the U.S. TikTok ban, many TikTok users flock to the Chinese Little Red Book websites called Red Note, which means we enter the Chinese internet world with the Chinese language. Because with AI translation, there is no barrier. And millions, literally, netizens from both countries compare notes; young people from Generation Z. And they first are comparing living standards in China and the United States. From big data, the result is the Chinese live a better life than Americans. This is very important. I share this view because I’ve been to the U.S. many times. Shanghai is much more developed than New York. I said this time, the United States will raise walls, and China will tear down the walls. It’s already happening with Little Red Book. We have this confidence.

Insajder TV:
That was my next question. It was the first time that many Americans, many Chinese had the opportunity to talk to each other that at least temporarily I use it also. Yeah, but do you see that Chinese internet opening up to the world in the future? And would that bring more prosperity, more innovation to China if that happens?

Zhang Weiwei:
You think China has not be innovative enough. We’ve already created so many apps for the world, TikTok.

Insajder TV:
There’s always more.

Zhang Weiwei:
Of course, and then DeepSeek have the United States and Silicon Valley are deeply worried, because this monopoly of chips, monopoly of AI business, OpenAI, this very foundation of monopoly is shaken, and don’t forget today’s US economy is to a great extent, depends on this kind of a belief. Very much is a myth: US is very strong, the best in technology. And that’s why we have the best performances in stock market. All these have loopholes here and there. China can use 1/20 of its price and achieve the same kind of AI result if not better. And more Chinese companies similar to DeepSeek are coming, I’m pretty sure about it. Chinese are very cautious people. We have one product or one company like that open to the world market, many others are in the pipeline. I can tell you for sure.

Insajder TV:
China is present in our region, especially in Serbia. China is one of the main partners, economic partners of Serbia, but Serbia is also a candidate country for the EU, and Brussels does not see favorably the Chinese influence in our country, because they think of this sphere of influence, precisely. What kind of future do you see for relations between Serbia and China given the current geopolitical state affairs?

Zhang Weiwei:
I think China and Serbia are two independent countries and their relationship and partnership, what now we call Comprehensive Strategic Partnership are formed within our own political, economic social context. Serbia want to join EU some support, some against, but that’s Serbians, domestic affairs. So I think these are two separate matters. I myself, did my PhD in Geneva University. I lived in Europe for 20 years. I know this deeply rooted bias against China, against Serbia, against Russia. It is not something superficial. It is deep rooted. Only you have lived in Europe for so many years, you know this by instance, so they try to find another excuse. But I think Europe itself will draw lessons. I went to Brussels many times. I talked to think tanks. I said, for instance, BRI initiative, Belt and Road Initiative will help Africa to build a new infrastructure, which provides many opportunities for Europe. You should also join us. Because every year you have so many illegal immigration from Africa, because there you have problems with job creation you need to create jobs there. Let’s work together. Europe always say no, all these geopolitcial considerations, ideological consideration. We are democracy, you are autocracy, it’s  stupid, I think. I said we don’t wait for you. We are like a bullet train. We move ahead.

Now 150 countries joined in BRI,  brand new infrastructure for many countries, based on new principle, discussing together, building together, benefiting together. Same principle apply for China cooperation with other European countries, with Serbia. Eventually, Europe will regret, I consulted them already. Don’t support Arab Spring, it will become Arab Winter, but they still support Arab Spring. What can we do? I said, don’t encourage NATO expansion. It will cause many troubles, many problems. They still support NATO expansion. And then in the end, the Ukrainian crisis, so many things. I’ll give you another example. Europe is known for green deal. Green deal is so lofty fanfare energy transition. China has completed it’s green deal, green energy now costs lower than traditional energy in China. 70 % EV vehicles produced by China. That’s for better climate protection, climate change, we have way to deal with that because of China. How we do it? No, but Europe said, no, I said we don’t wait for you. We had good cooperation with Europe many years back on this Galileo system, you may know this EU GPS system. In the end, they follow United States. They said a lot of restrictions are Chinese cooperation for this Galileo plan. We’ve already made the investment put money into it. Now we say, sorry, we withdraw from this cooperation, we do our own, we have Beidou system. Now the Beidou satellites is much better than GPS this is also available for all BRI members. So really, I think EU eventually it will realize they should really reduce this amount of arrogance. We don’t buy this.

Insajder TV:
Professor Zhang, thank you very much for your time.

Zhang Weiwei:
Thank you very much.

The post China Stands Unshaken in the Trump Earthquake first appeared on China Academy.

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Two Trumpian Presidencies: Domestic Constraints vs. Foreign Policy Surprises?

Such a sense of uncertainty is the result of two outcomes of the 2024 election. On the one hand, Trump possesses unprecedented political prowess, and even a mandate, from his electoral victory over his Democrat opponent Biden.

The Republicans also gained control over the legislative and judiciary branches of the government. This fusion of power, which frequently happens in parliamentary democracy, is rarely seen in the U.S. On top of all of this is Trump’s exceptional charisma and persuading power among his supporters, or 50% of Americans.

On the other hand, Trump’s domestic agenda (MAGA, etc.) is facing a lot of hurdles and opposition, such as the perception of a “deep state”, real or perceived; a deeply divided elite; and a dysfunctional, and highly politicized, civil service (such as during the LA fire). This is what Samuel Huntington defined in 1968 (Political Order and Political Decay), and later Francis Fukuyama in 2014 (Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy) called “political decay.”

Last if not least, the US society is plagued by inflation, violent crimes, a culture of gun-related violence, random or politically motivated, too many drugs, a growing homeless population (almost 800,000), an increasingly unaffordable healthcare system, etc.

Given these domestic hurdles, foreign policy is perhaps an area where President Trump could achieve some quick and visible gains. This was why Trump, in his inauguration speech, focused on domestic challenges, while giving only lip service to foreign policy issues.

Historically, and particularly after WWII, there has been an increasing concentration of presidential power over foreign policy.  This is the phenomenon of the so-called “two presidencies” in the U.S.: a constrained president on domestic issues, and a president who reigns supreme in foreign affairs. And the Trump presidency is no exception.

“Three Strikes” of Trump’s Foreign Policy

His foreign policy priority can be summarized as the “Three Ts”: tariff or trade wars against all; territorial acquisition (Greenland, Canada, Panama Cannel, etc.); and terminating, or ending, the Ukraine War.

There is, however, always a gap between the highly rhetorical and moralistic campaign promises, and actual policies once the president is in office. It remains to be seen to what extent candidate Trump’s “three strikes,” or “three Ts,” can be played out in his first 100 days (or, in Chinese, it is called 新官上任三把火).

Each of these three issues is a league of its own, and there are limits how much Trump can achieve these goals. Tariffs, for example, may generate some quick pocket money, but not without pain. It will add pressure to the already high inflation. Moreover, it may not lead to eventual import substitution. This is because the U.S. lacks engineers and skilled workers and it takes decades to train them.

In fact, the US manufacturing sector has continued to decline in the past decade despite increasing Federal subsidies. Just look at the cases of Boeing, Intel, US Steel, etc. Even the US military finds itself highly dependent on China’s supply chains according to some recent Pentagon estimates. Moreover, new investments are more likely to use automation and AI, rather than hiring more expensive workers. Last if not least, the US manufacturing sector, which is about only 10% of the GDP, is particularly vulnerable to retaliations from other countries. President Trump, therefore, will have to navigate carefully in a trade war, which usually produces losers.

The second T is about territorial acquisition. As presidential candidate and president-elect, Trump repeatedly voiced his desire for land acquisition regarding Greenland, Canada, and Panama Canal. Given the huge power disparities between the US and these smaller and weaker states, the US does have the power to prevail. The question is whether the US has the authority, or the legitimacy, to take land from others in such a forceful manner. Even back in 1900, Teddy Roosevelt preferred “speaking softly” while carrying a “big stick.”  

The Trump team, therefore, will have to choose between “leading” (Americans love to talk about leading the world) by example of power, which was prevalent in times of colonialism and imperialism, or leading by the power of example of being a more benevolent hegemony able to persuade others with meaningful diplomacy. Of course, Trump’s articulated desire for land acquisition may be a kind of high-pressure negotiating tactic. Real policies could be more prudent. I hope so.

The third T is how to terminate, or end, the Ukraine war. On the campaign trail, Trump promised many times to that he would end the war in 24 hours. Ending the war, or any war, could be far more difficult than starting one, according to Henry Kissinger’s 2014 op-ed in the Washington Post on the Crimea crisis. For him, “[T]he test of policy is how it ends, not how it begins.”

Regardless, ending the bloody war in Ukraine is now on the agenda. For Trump, the Ukraine war was caused by NATO expansion. This is very similar to George Kennan’s 1997 warning in the New York Times that NATO expansion “would be the most fateful error of American policy in the entire post-cold-war era.”

Unfortunately, Kennan’s warning was ignored by the post-Cold War liberal interventionists and neocons. Five rounds of NATO eastward expansion eventually led to the Ukraine War and the death of tens of thousands of Ukrainians and Russians.

For China, and perhaps for most people in the Global South, letting others die for one’s own interests, be they geopolitical or ideological, is amoral and immoral. Worse, to win a war with the world’s largest nuclear arsenal, which is Russia, is like looking for winners in the Los Angeles fire, or the 1989 San Francisco earthquake. In the age of WMD and AI, there will be no winners. In this regard, Trump’s promise to end the Ukraine war is in line with China’s “principled neutrality” (that I will elaborate later).

If his war-ending effort would lead to some kind of de-escalation, conflict management, a ceasefire, or even long-term peace, the 47th president of the United States deserves serious consideration for a Nobel Peace Prize. This is my opinion. At least, that will be far more credible than the 2009 Nobel Peace Prize for Barack Obama, who did nothing except by being elected as US president.

Trump’s “China Issue”: Beyond another “Honeymoon”?

Finally, of all the three “Ts” of President Trump’s foreign policy priorities (tariff, territories, and terminating the Ukraine war), China is a ubiquitous factor behind all of them in the mind and rhetoric of Trump.  

But China can be America’s best friend or worst enemy. I forget who said this first. These extremes of bilateral ties are, nonetheless, still possible.

For the two great powers of totally different political, economic, and cultural attributes, finding a middle, or pragmatic way between the two extreme possibilities in order to co-exist in a turbulent world is perhaps far more important for the two sides than getting a Nobel Peace Prize.

At the moment, President Trump has taken the first step to reach out to China, as he indicated that he would like to visit China in his 100 days as US president.

China has reciprocated and is ready to live and thrive with a totally different great power like America. This is what tens of thousands of TikTok “refugees” have found out in the past few days in the little Red Note, and pleasantly “shocked-and-awed.”

It is, however, far from clear if the U.S. is willing and able to do so, given the highly ideological anti-China hawks among the US political elite.

But even if Trump’s reach-out is genuine, one recalls a US-China “honeymoon” four years ago: in Mar-a-Lago first in April 2017 and then in Beijing in November of the same year. It did not last long and was quickly replaced by trade wars, and finger-pointing across the Pacific during Covid times.

What is hoped is that the two sides will be more realistic about this unfolding second “honeymoon” between the two same heads of state in order to escape the familiar “love-hate” oscillation. The goal should be building bilateral ties on a normal, more pragmatic, and more predictable and durable basis. And this will be good not just for the two great powers. Ultimately it will make the world safer and more peaceful again.

The post A Brave & Grave New World of Trump 2.0? first appeared on China Academy.

Kaja Kallas during the confirmation hearing

First, China is significantly wealthier than it was in 2016. On November 5, the Chinese government released the latest report of state-owned assets. According to this report, as of 2023, the total assets of state-owned enterprises amounted to 371.9 trillion yuan, which is about $51 trillion. Back in 2017, when Trump began his first term, this figure was just $25 trillion. If Trump couldn’t take down China eight years ago, how can the EU possibly believe he’ll succeed today, when China is nearly twice as wealthy?

Chinese state media also released a video, showing China’s state-owned assets, including assets of state-owned enterprises, state-owned financial capital equity, financial enterprise assets, administrative and institutional state-owned assets, state-owned land, and water resources.

Notably, these assets are primarily concentrated in public services such as communications, mining, transportation and energy. By boosting country’s self-resilience in these key sectors, the Chinese government has significantly reduced costs for domestic manufacturers. For instance, on November 13, China completed the world’s biggest million-kilowatt offshore PV farm, capable of generating 1.78 billion kilowatt-hours of electricity annually—enough to power 2.67 million people for a year. With lower costs, it’s no wonder that “Made in China” products can offer competitive prices while steadily improving in quality. Since the fundamental competitiveness is from these state-owned assets that rely on 0% foreign investment, the EU’s threat is just noise to China.

China’s first MW-level offshore PV farm successfully connected to national power grid on November 13

Second, thanks to Biden spamming over 16,000 failed sanctions on Russia, China has stepped in as the perfect trading partner over the past two years. At the 2024 BRICS Summit, China and Russia signaled deeper cooperation on energy and financial aspects. Moreover, Biden’s sanctions have even pushed Russia toward developing a mutual defense treaty with North Korea, effectively easing China’s security burden in Northeast Asia.

Well, for the U.S., the Washington Post tried to spin the narrative that Trump still has a good personal friendship with Putin, falsely claiming that they had a phone conversation on November 7. However, on 11, Russia’s spokesperson denied it and highlighted that Putin had no specific plans to speak to Trump.

Apart from Russia, China has gained more friends in the Global South through its Belt and Road Initiative. According to the government website, China has signed more than 200 Belt and Road cooperation agreements with over 150 countries, accounting for more than 70% of all countries in the world. As of 2023, two-way investment with these countries has surpassed $270 billion.

In addition, Switzerland, Poland, Italy and other 7 EU members are also part of China’s BRI. This has left some in China wondering whether Kaja Kallas is trying to help the United States divide the EU. If that’s the case, her threats have almost done the job.

When Trump announced tariffs on Chinese exports in 2018, he said the levies would make the U.S. a “much stronger, much richer nation.” However, Americans now only get a much stronger National Debt and a much richer Wall Street.

As China’s Foreign Minister Wang Yi said at the UN, “Sanctions and pressure will not bring monopolistic advantages, suppressing and containing others will not solve problems at home.” Compared to China, people in the EU are facing “higher costs” of their gas, food and healthcare bills, but Kaja Kallas chose to blind to it.

The post EU is Committing Suicide for Trump’s Trade War II first appeared on China Academy.

As the U.S. presidential election approaches, a new wave of legislative efforts targeting China is sweeping through American politics. Both Democratic and Republican candidates are competing to show their tough stance on China, especially with relentless moves against China’s emerging industries, like EVs.

For example, on September 23, the U.S. Department of Commerce officially announced a proposal to ban the use of key Chinese hardware and software in smart vehicles within the U.S. The final rule is expected to be confirmed by January 20 next year.

It is worth mentioning that the two parties, which have always had opposing ideas, rarely reached a consensus on the issue of imposing tariffs on Chinese imports.

As early as May 14, the White House issued an announcement announcing additional tariffs on $18 billion worth of products imported from China. According to the document published by the FACT SHEET: President Biden Takes Action to Protect American Workers and Businesses from China’s Unfair Trade Practices published by the White House, the United States will impose tariffs ranging from 25% to 100% on the following products from China:

The list of Chinese products subjected the increased tariff imposed by the U.S. (Source: Visual Capitalism)

As of now, since 80% of U.S. port cranes are manufactured by China’s ZPMC, the proposal to impose tariffs has faced strong opposition from American industries. As a result, products like port cranes have been added to a list for delayed implementation, while other measures are still gradually advancing.

Joe Biden addressed in front of Chinese cranes.

Seeing the Biden administration’s bold moves, it’s no surprise that the typically aggressive Donald Trump would not be outdone—he has promised to push for even harsher measures.

In an interview with Time magazine, Trump stated that if re-elected in November, he would impose even more tariffs on China. He plans to levy a 60% tariff on all Chinese goods and a minimum 10% tariff on $3 trillion worth of all U.S. imports. This approach, even more aggressive than his previous trade war with China, is aimed at reducing federal income taxes and replacing that revenue with tariffs.

There seems to be a sense of urgency in U.S. politics, as if America believes that failing to act now will mean losing its grip on global dominance. To counter this, the U.S. is mobilizing all its resources, building a “small yard, high fence” strategy. Beyond imposing tariffs, it is restructuring supply chains through near shoring and friend-shoring, either persuading or pressuring allies and ideologically aligned nations to join in containing China.

For example, Canada, after detaining Meng Wanzhou at the behest of the U.S., once again followed America’s lead by mirroring its punitive tariffs on China. On August 26, Prime Minister Justin Trudeau announced that Canada would impose a 100% tariff on EVs imported from China and a 25% tariff on Chinese steel and aluminum. These tariff rates match those imposed by the U.S.

Another example is the European Union. Shortly after the U.S. announced a new round of tariffs in May, the European Commission followed suit. On June 12, it declared that, starting July 4, the EU would temporarily raise import tariffs on Chinese EVs. However, due to pressure from businesses and markets, the rates were later lowered.

Following the crackdown on Huawei, a new strategic battle to stifle China’s EVs and new energy industries is now unfolding.

Civilians are bearing the costs of politicians’ escalating tough stance on China.

Since Trump initiated the trade war with China under the guise of fair trade and balancing the U.S.-China trade deficit, the U.S. has consistently wielded the sanctions stick worldwide. It has become increasingly addicted to this approach, eager to punish anyone who doesn’t align with its interests.

Actually, trade war is always a double-edged sword, which cannot hurt the opponent without affecting the initiator himself. Indeed, Trump’s trade war, combined with Biden’s tech restrictions, has created significant challenges for China’s economy. However, most of the tariffs imposed by Trump have been passed on to American consumers, burdening U.S. businesses and the public.

As U.S. Vice President Kamala Harris stated at a campaign rally in North Carolina on September 16, Trump’s import tariffs are essentially a “Trump tax” on the American people. During a debate with Trump, Biden also harshly criticized Trump’s tariff policy, claiming it costs each American household an additional $2,500 annually.

It’s worth noting that a recent analysis by the Peterson Institute for International Economics found that if Trump were to impose a 10% tariff on all goods and a 60% tariff on China, a typical family in the middle of the income distribution would see their annual expenses increase by about $2,600.

Distribution of tax increases and reductions under Trump proposals, percent change in after-tax income (Source: PIIE)

Also, an analysis by the American Action Forum estimates that a 10% tariff could add up to $2,350 in extra costs per year for each U.S. household. Additionally, a 60% tariff on Chinese goods would further increase household expenses by an additional $1,950 annually.

Whether it’s a 25% or 60% tariff, the extra costs imposed on U.S. consumers show that the American market needs these products. If decoupling from China were truly feasible, Trump or Biden would have achieved it by now. Bold words aside, both presidents eventually realized the U.S. is too dependent on Chinese goods and resources. Immediate decoupling would be disastrous for the U.S.

Exactly, decoupling would certainly create tough times for China’s export-driven businesses for a while. However, the U.S. market could face severe shortages, with half of its goods unavailable, leaving consumers unable to purchase everyday items, even if they have the money. Life would become unmanageable.

A view of empty shelves at a local Giant supermarket in Alexandria, Virginia.

Para Bellum

“Para bellum” is a Latin phrase meaning, “If you want peace, prepare for war.” Lately, U.S. politicians have been citing this phrase, positioning themselves as innocent peacekeepers forced into conflict for the sake of peace. A striking example is the assassination of Hamas leader Ismail Haniyeh during his visit to Tehran. To prevent Iranian retaliation against Israel, the U.S. deployed two carrier strike groups to protect Israel.

So “para bellum” actually serves as a moral and legal pretext for them to suppress rivals and flaunt their military power. Those who frequently use this phrase are more interested in the spoils of power-driven conflict. The belief that overwhelming strength can crush any opponent is the jungle law Western powers have relied on for centuries.

Take the recent events as an example. During the UN Future Summit, the reformist Iranian President Masoud Pezeshkian compromised with Israel and said that he would not retaliate against Israel for Haniyeh’s death, trying to prevent the expansion of the conflict. The result was just the opposite. Iran’s compromise was exchanged for Israel’s further encroachment. The Israeli army successively carried out pager explosions in Lebanon, killed Hezbollah leaders including Nasrallah in the bombing, and launched a ground war against Hezbollah in Lebanon.

Therefore, for this kind of enemies, compromise will not bring peace, but will only make them increasingly aggressive and greedy.

U.S. Deputy Secretary of State Kurt Campbell stated before the House Foreign Affairs Committee on September 18 that China poses the greatest comprehensive challenge in U.S. history, surpassing even the Cold War. “Frankly, the Cold War pales in comparison to the multifaceted challenges that China presents. It’s not just a military challenge; it’s across the board. It is in the Global South. It is in technology. We need to step up our game across the board.”

Both U.S. parties are unprecedentedly united in their hostile stance toward China. Regardless of who takes office next, a new round of U.S.-China trade conflict seems inevitable. Moreover, conflict may not be limited to trade alone.

Will China allow the “naive but rich” stereotype to repeat itself? Clearly not. In recent years, public discourse has shifted, with the view that “Cast Away Illusions, Prepare for Struggle” becoming a widespread consensus. The idea that “Throw out one punch now to avoid a hundred punches in the future.” is gaining acceptance. After all, if a trade war with China proves profitable without significant backfires, other countries might follow the U.S. to “feast” on China’s resources.

The post No Matter Who Wins, They Will be Enemy of the Chinese first appeared on China Academy.