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Over the weekend, the Trump administration signaled that new tariffs on semiconductor imports were on their way. The news dashed any hopes some may have harbored that an announcement Friday excluding smartphones and computers from steep new tariffs on China indicated a willingness on behalf of the U.S. government to find an off-ramp to the trade war.
It is a conflict that China seems, for now, willing to engage in. After President Donald Trump hiked tariffs on China, Beijing raised its levy on U.S. goods to 125%, dismissing the U.S. strategy as a “joke” in the process.
Linggong Kong, an expert on U.S.-China relations at Auburn University, suggests that Beijing’s “bring it on” approach is more than just bravado − it is grounded in a confidence that China has the upper hand. Since an earlier trade war with Beijing in Trump’s first administration, China has insulated its domestic economy against the worst effects of a U.S. tariff shock. Meanwhile, Chinese President Xi Jinping is well aware that he has the tools to inflict pain on certain U.S. sectors, notably tech and agriculture.
Moreover, the U.S. strategy presents China with the chance to deepen cooperation − and increase influence − with global trading partners who may be smarting from Trump’s tariff policy. To that end, Xi kicked off a three-nation visit to Southeast Asia on Monday by urging stronger trade ties with Vietnam, the first stop.
“While Trump’s tariffs will inevitably hurt parts of the Chinese economy, Beijing appears to have far more cards to play this time around. It has the tools to inflict meaningful damage on U.S. interests – and perhaps more importantly, Trump’s all-out tariff war is providing China with a rare and unprecedented strategic opportunity,” Kong writes.
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