News Desk
China has adopted a defensive posture in the face of U.S. President-elect Donald Trump’s proposed 60 percent tariff hike on Chinese goods, choosing restraint over retaliation. Confronted with a slowing economy, property crises, and shrinking global influence, Beijing has opted to focus on economic recovery rather than risking further escalation in the trade conflict.
While international observers expected a more confrontational stance from China, the response has been calculated. Beijing’s spokesperson Liu Pengyu emphasized cooperation, stating, “China believes that China-U.S. economic and trade cooperation is mutually beneficial. No one will win a trade war or a tariff war.” This tempered tone contrasts with the aggressive retaliations often seen in past trade disputes.
China’s decision reflects its internal economic challenges. The country’s share of the global economy dropped to 16 percent in 2024 from 18 percent in 2021, signaling a decline in its once-dominant position. Struggling with unemployment, sluggish domestic consumption, and a real estate crisis, China has prioritized self-sufficiency and economic stability.
“Expecting a hardline posture from Trump, China is making tactical adjustments with major powers in Asia, notably India, Japan, Indonesia, and Vietnam,” said Srikanth Kondapalli, a professor of China studies at Jawaharlal Nehru University in New Delhi. These adjustments are part of a broader strategy to diversify trade relations and mitigate reliance on the U.S.
Economic experts have warned that retaliating against U.S. tariffs could exacerbate China’s economic slowdown and further strain its manufacturing sector. Daniel H. Rosen, head of China Practices at the Rhodium Group, highlighted the potential ripple effects: “Such tariffs could prompt European economies to align with the U.S. on controls, amplifying China’s export challenges.”
Li Wei, a glass manufacturer in northern China, voiced concerns about the impact on small businesses. “Such a large increase in tariffs by the United States will definitely have a great impact on me and my business,” he said. Allan Von Mehren, chief analyst at Danske Bank, echoed these concerns, warning of significant repercussions for China’s economy.
To counter the effects of U.S. tariffs, China has pivoted toward boosting domestic demand and implementing fiscal stimulus measures. Policies include relaxed monetary approaches and plans for robust government spending in 2025. “We think it points to strong fiscal stimulus, big rate cuts, and asset buying,” said Xing Zhaopeng, senior China strategist at ANZ.
Joe Mazur, an analyst at Trivium China, noted that Beijing is also leveraging legal avenues, arguing that the tariff hike violates fundamental World Trade Organization principles. However, China’s history of skirting WTO norms complicates its credibility in these efforts.
Beijing’s cautious stance underscores its focus on long-term stability over short-term retaliation. By expanding trade ties in the Global South and engaging with regional powers, China is working to reduce its vulnerability in a world increasingly skeptical of its economic dominance.
As Trump’s tariff plans loom, China’s measured response highlights its precarious position on the global stage, caught between maintaining its economic lifeline through exports and navigating the fallout of strained trade relations with its largest trading partner.
