China reaction to US tariffs: Why Beijing is playing the long game over a zero-sum game

China’s absorption — the announcement of retaliatory tariff but not overmuch occurrence and brimstone successful rhetoric — has made it wide that Beijing was prepared for this tariff escalation for a agelong time.

Besides, arsenic well-known US world and erstwhile elder advisor astatine the US Department of State, Jessica Chen Weiss, precocious observed, some the governmental elite and the intelligentsia successful China seems rather alert that Trump intends to usage the tariffs to “shape Chinese behaviour” to suit US interests, and not arsenic an economical extremity successful themselves.

The 2 rounds of tariffs

When Trump connected January 21 announced the further 10% tariffs connected China, effectual from 1 February, policymakers and experts were rapidly engaged analysing the differences betwixt the erstwhile (2018) and the existent tariff regimes. Differences see 1) dissimilar successful 2018, present the tariffs included each Chinese products, including goods valued astatine little than $800 that were earlier exempt; 2) this time, Trump besides threatened to summation oregon grow the scope of tariffs if different countries were to follow retaliatory measures.

Because the tariffs imposed by Trump connected China successful 2018 were not cancelled during Joe Biden’s term, the existent tariffs connected China’s exports to the United States are comparatively high. Bo Chen, a elder researcher with the National University of Singapore’s East Asia Institute, agrees with mainland China scholars that “given the existing punishment tariffs, the full US tariffs connected Chinese products would magnitude to astir 35%.”

Why Beijing has reasons for optimism

The biggest harm to China caused by the tariff initiated successful 2018 was China losing its two-decade-long presumption arsenic the apical exporter to the United States (surpassed by Mexico successful 2023).

But ruling retired a implicit decoupling nether Trump 2.0, scholars successful China are rather optimistic, astatine slightest successful concern and trade, of a non-confrontationist China argumentation nether the caller US administration. They basal their optimism connected the corresponding commercialized figures betwixt China and the US successful 2018 and 2024, respectively.

Even Jessica Chen Weiss, cited above, thinks determination are “voices wrong Trump’s economical squad who are much inclined to spot the menace of tariffs” determination Beijing toward a caller commercialized woody with Washington.

In 2018, China exported US$478.42 cardinal to the United States and imported US$155.10 billion. In 2024, China’s exports stood astatine US$524.656 billion, portion it imported US goods worthy $163.624 billion. More importantly, arsenic galore Chinese scholars note, during the commercialized warfare nether Trump’s archetypal term, the 2 countries “were warring and talking astatine the aforesaid time.” Similarly, they expect, some sides volition proceed to negociate adjacent arsenic they enforce tariffs connected each other.

Moreover, scholars successful China notation to a slew of affirmative developments and statements from some sides to warrant their optimism. These references see Xi-Trump telephone speech connected January 17; Trump’s invitation to Xi Jinping to be his inauguration; Trump’s remark portion nominating David Perdue arsenic the caller US ambassador to China that “he (Trump) wants to person a productive narration with the Chinese leaders”; and Trump’s announcement to the media aft taking oath that “he plans to sojourn China wrong the adjacent 100 days.”

US-China tariff war: Zero-sum crippled oregon a agelong game

In summary, fixed that China’s apical leaders and policymakers firmly judge that the US system has been successful inexorable decline, and that Trump is talking tariffs with allies too, Beijing request not interest excessively overmuch astir a commercialized warfare betwixt Washington and Beijing.

Beijing has implicit the past respective years focussed connected interior consolidation and gradual economical recovery. As a caller commentary successful Foreign Policy successful Focus has observed, “China strategy suggests a willingness to fto Trump marque the archetypal move. Beijing besides knows the four-year timeline limiting Trump’s ambitions.” Hence, Xi has the luxury of opting for a patient, deliberate playing of a long-game implicit a zero-sum game.

Hemant Adlakha teaches Chinese astatine the Jawaharlal Nehru University successful New Delhi. He is besides Vice Chairperson and an Honorary Fellow, Institute of Chinese Studies (ICS), Delhi.