Beijing is now better prepared for a tariff war with the US than in 2016, when Donald Trump began his first presidential term, assessed the British newspaper “Financial Times”. In competition with the United States, China can leverage its position as a major supplier of critical raw materials.
“Chinese leader Xi Jinping was dismayed by Trump's election victory in 2016 and his imposition of high tariffs (…) and sanctions on Chinese companies,” recalled “FT”. But now, as the daily noted, Beijing has prepared strong retaliatory measures against American companies “in case Donald Trump ignites a smoldering trade war between the world's two largest economies.”
“FT” emphasized that Trump is signaling a tougher course towards the People's Republic of China. He announced, for example, that he would fill key state positions with politicians considered “hawkish” in their approach to China.
Among them is Marco Rubio – the author of the draft resolution banning TikTok in USA – who will take over as Secretary of State.
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Beijing sent 'warning signals'
Over the last eight years, Beijing has introduced, among others: retaliatory sanctions in response to restrictions introduced by other countries or the “list of unreliable economic entities”, which may include companies perceived by the Chinese authorities as harming the interests of the state. As noted by “FT”, China may, for example, cut off these companies from supplies of critical raw materials necessary for the development of new technologies.
– Many underestimate how much Beijing can harm American interests, said Andrew Gilholm, chief analyst at the consulting firm Control Risks, in an interview with the FT.
The researcher pointed to “warning signals” that Beijing has been sending in recent months – including: sanctions prohibiting Chinese companies from supplying components to Skydio, one of the largest drone producers in the USA, or threats to withdraw access to the Chinese market to the PVH concern, which owns, among others, Calvin Klein and Tommy Hilfiger brands. In 2016, only 179 American entities were subject to Chinese sanctions, and in 2024 – 1,412.
– This is the tip of the iceberg – said Gilholm. – I keep telling my clients: you think you are aware of the risks associated with the US-China trade war, but this is not true, because China has not yet carried out real retaliation – he emphasized.
Another FT interlocutor, Joe Mazur, an analyst at the Beijing-based consulting company Trivium, believes that Trump's protectionist turn may even work to China's advantage. – If other large economies began to perceive the US as an unreliable trading partner, they could try to develop deeper trade ties with China in search of more favorable export markets – he noted.
Trump criticizes China
Donald Trump During his election campaign, he repeatedly spoke critically about China. Among other things, he blamed them for unfair competition and “killing off” American industrial production. He announced the imposition of 60 percent tariffs on all products imported from China, and even higher tariffs on some of them. – I will impose whatever tariffs are necessary: 100, 200, 1000 percent. They will not sell a single car in the United States from the factories they are building, he said on October 10 at a rally in Detroit, referring to Chinese car factories that are currently being built in Mexico.
Trump also claimed that he had very good relations with Xi Jinping. “He was really good, I don't want to say he was a friend – I don't want to say stupidly 'he was my friend', but I got along great with him,” he said in mid-October in an interview with the Wall Street Journal. He also maintained that he would not have to use military force to prevent a blockade Taiwanbecause the Chinese leader “respects me and knows I'm f***ing crazy.”
Main photo source: PAP/EPA/CRISTOBAL HERRERA-ULASHKEVICH