In a recent development, leaders from Canada and Mexico reached out to U.S. President Donald Trump after he imposed tariffs on their nations. However, China’s President is likely to take a different route. For years, China has been embroiled in a trade and tech conflict with the U.S., and it seems they have opted not to make such direct contact with Trump during his second term.
Beijing, distinct from America’s close neighbors, insists that any negotiations should take place on equal terms. Though open to discussions, China has readied itself for the anticipated increase in U.S. tariffs, which have seen a 20% hike since Trump began his second term seven weeks prior. Learning from previous experiences, China is prepared for retaliation, having recently implemented tariffs on key American agricultural imports and other goods.
“As tariffs escalate, retaliation is seen as the only option for Beijing,” commented Sun Yun of Washington’s Stimson Center. Sun emphasized, “Beijing is not averse to negotiation but refuses to appear vulnerable by begging for talks.”
China’s aspirations, as the world’s second-largest economy, include being recognized as a global power, with respect commanded from significant nations like the United States. Following the U.S.’s recent imposition of an additional 10% tariff, China’s Foreign Ministry made a sharp response: “If the U.S. desires a tariff or trade war, we will fight to the end.”
Echoing the harsh exchanges of 2018 when Trump first initiated a trade war, China now carries a full suite of countermeasures, including tariffs, import restrictions, export controls, sanctions, and regulatory hurdles to deter U.S. businesses. These tools are intended to impact the U.S. economy and its enterprises significantly.
China responded swiftly to Trump’s latest tariffs by enacting measures against U.S. goods, including a 15% tariff on several American farm products, the suspension of U.S. lumber imports, and the blacklisting of 15 American firms. Analysts indicate Beijing has tempered its responses to leave room for potential negotiations.
Xi Jinping’s leadership through Trump’s terms has provided China with strategic continuity. Daniel Russel, of the Asia Society Policy Institute, remarked that Xi has decided now is not the time for a call with Trump, stating, “It’s about leverage for China. Xi won’t subject himself to any possibility of being pressured or embarrassed.”
Chinese Foreign Minister Wang Yi, during a recent press conference, cautioned against any nation attempting to suppress China while maintaining cordial relations. He emphasized that contradictory behavior could harm bilateral ties and hinder trust. “If pressure persists, China will definitely retaliate,” Wang added.
Scott Kennedy of the Center for Strategic and International Studies noted that Trump’s tactics this time around have not caught Beijing off-guard. “They’ve anticipated these actions and prepared accordingly,” he remarked. Although China’s economic growth has decelerated, it continues to expand at nearly a 5% annual rate. Under Xi, the nation is propelling itself forward with investments in advanced technology and other sectors, and has secured stronger trade relations globally.
China’s trade with the U.S. now represents a smaller share than before, while the country benefits from diverse import sources, such as getting most of its soybeans from Brazil and Argentina. “China is now in a better position to withstand such economic shocks than in previous years,” Kennedy explained.
Conversely, Canada and Mexico remain heavily reliant on the United States, with over 80% and 75% of their exports headed to the U.S., respectively. Russel suggested that China, learning from past interactions with Trump, is aware that acquiescing rarely yields sustainable results. Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum are confronting policy reversals and postponed tariffs on certain exports.
Trudeau and Sheinbaum’s initial attempts at diplomacy may have bought them time during Trump’s first term, but the pressure inevitably returned stronger, Russel noted. Trudeau, after meeting Trump in December to counter threats of tariffs, stated firmly after announcing reciprocal tariffs, “This is the time to respond decisively,” urging that “a conflict with Canada will ultimately yield no victors.” Similarly, Sheinbaum conveyed, “No one benefits from this decision.”
