On April 22, during a press conference at the White House, U.S. President Donald Trump acknowledged that the 145 percent tariff rate his government has imposed on China was indeed very high, but assured reporters that the tariffs would be significantly reduced, though not eliminated entirely. In response, Treasury Secretary Scott Bessent said that the current high tariffs between the two sides effectively amounted to a trade embargo.
Recently, Trump has met with several top business executives at the White House, many of whom have warned that the reciprocal tariffs are damaging the U.S. economy and could potentially derail it entirely.
Under the tariff pressure from Trump, China might be the only country to adopt a tough stance. Not only has it continuously raised tariffs on U.S. goods, but it has also implemented a range of restrictive measures, such as placing export controls on seven rare earth elements and even returning Boeing aircraft. This assertive and well-organized response can be attributed to China’s experience during the trade war of Trump’s first term. In the face of pressure from Trump’s “reciprocal” tariffs, China has remained methodical and composed, while other economies have been thrown into anxiety and rushed to negotiate.
China’s ability to remain calm in the face of Trump’s tariff pressures is primarily due to three key perspectives held by Chinese leaders regarding relations among major powers.
The U.S. Is Here to Stay as a Global Power…
First, despite considerable shifts in the global order, the United States remains a dominant force. While the Trump administration has ushered in a period of strategic retrenchment, resulting in a relative decline of U.S. influence globally, the U.S. share of global GDP is expected to hold relatively steady. According to data from World Economics, the U.S. is projected to account for 12.7 percent of global nominal GDP in 2024, with that figure expected to dip to 11.8 percent by 2030. Clearly, the U.S. will continue to wield significant influence on the world stage.
Moreover, the United States retains formidable economic, military, and technological power. Its investments in research and development (R&D) and military spending far outstrip those of other nations. In 2023, U.S. R&D spending reached $783.6 billion, compared to China’s $723.6 billion. Additionally, according to the Lowy Institute’s Asia Power Index, the U.S. ranks first in military capability, scoring 90, while China, in second place, lags behind with a score of just 69.7.
Thus, while President Xi Jinping has characterized the current global landscape as one marked by unprecedented change, Beijing is unlikely to rush into proclaiming the end of U.S. power. Evaluations of the United States’ decline remain measured and cautious. For the time being, China’s priority is centered on strengthening its domestic economy, with a particular emphasis on fostering new quality productive forces in emerging technologies.
…But Tariffs Are Eroding U.S. Advantages
That said, China does see changes underway in the global balance of power. This is the second perspective: the evolving international order is not only becoming more multipolar but also increasingly globalized. Trump’s tariff policies have disrupted global supply chains, and the fallout is already beginning to harm the U.S. market, economy, and even its technological innovation. Both China and the United States occupy pivotal, interconnected roles in the global trade network. In 2023, China was the largest bilateral trading partner for 60 economies, while the U.S. held the same position for 33 economies.
The reciprocal tariff policies implemented by the Trump administration have caused long-term and irreversible disruptions to global supply chains. In the shipping industry, global container transport volumes are projected to decline by 1 percent due to the effects of Trump’s trade policies – only the third such decline since 1979. German shipping company Hapag-Lloyd reported that, as a result of the trade conflict between the world’s two largest economies, customers had canceled 30 percent of shipments from China to the U.S. Ben Hackett, founder of Hackett Associates, has forecast a decline of at least 20 percent in container imports to the U.S. in the second half of 2025.
Looking back at history, the tariffs imposed between 1870 and 1909 hurt U.S. businesses: each 10 percent increase in tariffs led to a 25 percent to 35 percent drop in productivity. J. Bradford Jensen, a professor of economics and international business at Georgetown University, has pointed out that tariffs and regulatory barriers fragment markets, forcing businesses to either reinvest or entirely abandon certain markets. This, in turn, could have profound and long-lasting negative effects on technological progress and economic growth.
Trump’s Diminished Popularity
Third, despite widespread pessimism about the prospect of a “Trump 2.0,” it is important to recognize the deeply complex and highly polarized political landscape currently in the United States. The political agenda represented by Trump has not garnered universal support across U.S. society and is in fact stoking vociferous pushback. Recent polling shows that Trump’s approval rating stands at 40 percent, and a significant portion of Americans – around 60 percent – disapprove of his handling of key policies, such as tariff increases and cuts to federal departments.
This domestic divide signals that Trump’s policies will likely face significant resistance going forward. The outcome of the 2026 U.S. midterm elections could have a significant impact on the redistribution of political power and the trajectory of policy.
As such, when considering China-U.S. relations and broader international strategic concerns, Beijing is unlikely to view Trump as a fixed or consistent factor. Chinese leaders will not make drastic shifts in their strategy toward the U.S. in response to temporary policy fluctuations. The nature of this competition is long-term and structural, shaped more by enduring geopolitical dynamics than by the ebb and flow of short-term political cycles.
China’s Alternatives
China has considerable room for cooperation with several major powers, offering strategic flexibility in responding to extreme trade restrictions imposed by the United States. Bilateral trade with Russia reached a record $240 billion in 2023, reflecting a 26.3 percent year-on-year increase. China is now Russia’s largest trading partner, with growing cooperation in sectors such as energy, automotive, and electronics. However, Russia’s economic slowdown poses challenges. In the first quarter of 2025, Russia’s imports from China decreased by 6.9 percent, primarily due to a combination of high interest rates and reduced consumer demand.
Regarding China-EU relations, despite trade tensions, there is significant potential for collaboration in areas like climate change, technological innovation, and global governance. For example, in April of this year, China lifted sanctions on members of the European Parliament to create a more favorable environment for bilateral relations. By strengthening ties with countries like Russia and those in Europe, China enhances its strategic autonomy and flexibility in the global multipolar order. This not only supports the development of an open world economy but also contributes to global economic stability and growth.
In the current complex and ever-changing international economic environment, China’s strategy in response to U.S. tariffs reflects both careful calculation and unwavering resolve. Faced with trade pressure from the Trump administration, China has chosen a measured approach – neither hastily conceding nor resorting to reckless retaliation. Instead, it has implemented a range of targeted measures designed to preserve economic stability and resilience. For example, China has kept tariffs at zero on certain crucial semiconductor products to protect the long-term growth of its high-tech industries.
China is also looking to win over allies among those impacted by Trump’s tariffs. As Chinese Central Bank Governor Pan Gongsheng emphasized at the second G-20 Finance Ministers and Central Bank Governors meeting, economic fragmentation and trade tensions are disrupting global industrial and supply chains, threatening the momentum of global economic growth. Pan noted that China remains steadfast in its commitment to defending a multilateral trade system centered around the World Trade Organization. It advocates for resolving trade disputes through fair dialogue and consultation, while also continuing to assert its legitimate rights and interests.
In essence, China is resisting the impulse to give in to short-term reactions and instead prioritizing long-term stability and growth.