The trade war in China is in full swing

In the midst of the global rate offensive of the US President Donald Trump, China and the United States are locked up in a cycle of trade delay, with both parties who did not want to be considered a origin.

On April 2, which he called ‘Liberation Day’, Trump announced superior tariff increases in most countries around the world, supposedly designed to give us trade barriers for ‘reciprocal’ levels (although, as if Critics have noticedThe simplistic formula that is used seems to reflect the American trade shortage with different countries instead). Especially for China, the announcement of 2 April called on a rate of 34 percent – on top of two separate 10 percent tariff increases in February, which Trump had linked to the role of China in the American fentanyl crisis.

China responded to each of these escalations with a mirror response: increasing its own rates for the entry of the US, adding American companies to its unreliable entity list and limiting the export of critical minerals. In response to the walk of April 2, China brought his response by hitting a rate of 34 percent on all American exports to China – no longer limiting the damage to targeted sectors.

Trump was furious about China’s reaction and immediately threatened to raise an extra rate of 50 percent on Chinese goods. At first it was not clear whether this was a serious policy decision whether Trump-like bluster was, but on 8 April the day before the “mutual rates” it was confirmed that the new walk took place.

“It was a mistake for China to take revenge,” told reporters’ press secretary Karoline Leavitt of the White House. “The president, when America is beaten, he hits harder. That is why there will be 104 percent rates at China at midnight.” (The number of 104 percent comes from the total of all individual tariff increases from Trump: 10 percent, 10 percent, 34 percent and 50 percent.)

Treasury Secretary Scott Bessent Also told CNBC That it was a “big mistake” for China to take revenge on Trump’s rates.

The Trump government would probably not be satisfied when China reacted its own rate increase on 9 April. The Chinese State Council announced that the rates increased to 84 percent over all American imports, with an agreement with the escalation of 50 percent of Trump. A statement from the Trade Ministry of the Trade, which unintentionally reflects the language of the Trump administration, said: “The American threat to escalate rates about China is a mistake on top of a mistake.”

This is due to the cause of the problem: both Washington and Beijing believe that the other side makes a “mistake” by taking revenge (instead of, presumably, folding and coming to the table for negotiations to end the trade war). This assumption is supported by the trust of each party that their country is better positioned to withstand the inevitable pain that the tariff increases will follow.

“What do we lose because of the Chinese who pick up rates?” Bessent said negative to CNBC. “We export one fifth to them to what they export to us, so that’s a losing hand for them.”

However, China’s policymakers do not agree. They bet the American public will refuse to tolerate competitive rates of rates – a logical assumption, since Trump is largely chosen based on Dissatisfaction with inflation – as well as the constant crash of the US stock market. Some CEOs have already done that called the economic damage “The Trump recession.” Beijing seems willing to gamble that the rising internal pressure will force Trump to withdraw without having to make China concessions.

There is also the fact that Trump has essentially explained a trade war against the whole world, which seriously limits the American alternatives to Chinese input. China, which fights on one front, has more options to diversify his markets for both imports and exports – a possession that Beijing had already started seriously during the first Trump administration. But, experts warn, it is unlikely that the rest of the world is willing to absorb the massive excess capacity that would be caused by a sharp drop of Chinese export to the United States. Attempts to export more to the rest of the world can cause a Domino effect of dissatisfaction in China’s other trade relations.

In addition to the economy, there is also a psychological dimension for the trade war that feeds the escalation cycle. In contrast to other countries that have shown the willingness to negotiate with Trump – such as Vietnam, Japan and India – China is locked up in a global rivalry with the United States. Each side looks at the others with an extremely suspicion, and that makes every compromise unlikely. Instead, both the United States and China have accused each other of bullying behavior, as a result of which an emotional component is added to the trade war that will make it extremely difficult for Trump or Xi Jinping to withdraw.

“China rejects firmly and will never accept such a hegemonic and bullying movement,” said Lin JianThe Chinese spokesperson for the Ministry of Foreign Affairs, in a regular press conference on 9 April. “… If the US does not decide to give the interests of the US itself, China and the rest of the world, and is determined to combat a rate and trade war, the reaction of China will remain until the end.”

Bushy Called China “The worst offenders in the international trading system.”

Both Beijing and Washington have already indicated that they will wait until the other side comes to start to start negotiations.

“If the US really trying to solve the problem through dialogue and negotiations, this should show an attitude of equality, respect and reciprocity,” Lin said.

In the meantime, Leavitt had told reporters on 8 April that China should be the one who would start conversations to end the rates. “The president also wanted me to tell you all that if China reaches to close a deal, he will be incredibly merciful, but he will do what is best for the American people,” ” she saidAdding: “China must call first.”

For now, instead of trying to negotiate, China is taking steps to strengthen his economy internally. According to ReutersTop Chinese policymakers – including senior officials of the State Council, the People’s Bank of China and the bank and securities rulers – would hold an urgent meeting this week “to insist measures to stimulate the economy and stabilize capital markets.”