Is time on China's side in Trump's trade war? | DW News

Summary

China’s leader Xi Jinping concludes his Southeast Asia tour, aiming to strengthen ties amid escalating trade tensions with the United States. In response to U.S. tariffs, China has implemented retaliatory measures, including export controls and efforts to diversify trade relationships globally. Experts discuss China's long-term strategy, including its positioning as a stable trade partner and its challenges in the ongoing trade war. The geopolitical impacts are explored, with China leveraging its political system to endure the trade conflict, while also fostering closer relations with the Global South. The complex interplay of tariffs, diplomacy, and global supply chains is central to this economic rivalry.

Takeaways

• 😀 Xi Jinping's Southeast Asia tour was aimed at shoring up support for China amid trade tensions with the United States.
• 😀 China has imposed significant tariffs on US goods in response to the US's trade charges, with tariffs reaching up to 145%.
• 😀 US President Donald Trump has implemented global trade tariffs, claiming they will foster economic growth in the US.
• 😀 China's retaliatory tariffs have reached 125% on US goods, signaling a prolonged trade war.
• 😀 China is using diplomatic means, such as suspending mineral exports and investing in its stock market, to influence the trade war.
• 😀 Xi Jinping is positioning China as a stable, reliable partner in global trade, in contrast to the chaotic US approach.
• 😀 China’s Belt and Road Initiative is being promoted as a way to foster trade and infrastructure investments globally.
• 😀 The US-China trade war has broader geopolitical implications, especially concerning supply chains in critical industries like AI, semiconductors, and biotech.
• 😀 Middle-tier countries are trying to avoid choosing sides in the trade war, seeking diversification and more trading partners.
• 😀 China is engaging the Global South, appealing with opportunities like de-dollarization and offering more trade avenues to avoid reliance on the US dollar.

Q & A

What is the main reason behind China's Southeast Asia tour by Xi Jinping?

Xi Jinping's Southeast Asia tour aimed to shore up support as China faces escalating trade tensions with the United States. This was especially important as China was responding to the trade war initiated by the U.S., including the imposition of high tariffs on Chinese exports.

What stance did Xi Jinping take on the U.S.-China trade war?

Xi Jinping remained firm and refused to back down, indicating that China would not relent to the U.S.'s demands and that the country was ready to continue its trade retaliation if necessary.

How did the U.S. respond to China's retaliatory tariffs?

In response to China's retaliation, the U.S. escalated the trade war by repeatedly increasing tariffs on Chinese goods, which ultimately reached 145%. This led to a cycle of retaliatory measures between the two countries.

What is China's perspective on the ongoing tariff hikes by the U.S.?

China views the U.S.'s tariff hikes as a mistake, emphasizing that they are prepared for negotiations but will not back down if the U.S. continues to act aggressively in the trade war.

How does China plan to influence the U.S. to come to the negotiation table?

China is leveraging multiple strategies to bring the U.S. to the negotiating table, such as suspending critical mineral deliveries and using its political and economic leverage to cause discomfort for U.S. manufacturers and consumers.

What is the potential impact of the trade war on middle-tier countries like Malaysia and Vietnam?

Middle-tier countries, such as Malaysia and Vietnam, are caught between the U.S. and China in the trade war. These countries seek diversification of markets and want to avoid being forced to choose between the two economic giants, as they risk economic disruption from the tariffs.

What does Alex Capri suggest about China's long-term strategy in the trade war?

Alex Capri suggests that China is playing the long game, positioning itself as a stable and reliable trading partner, especially for countries in the global south, by offering infrastructure investments through the Belt and Road Initiative.

How is China managing the economic risks of its retaliatory measures?

China is managing the economic risks of its retaliation by considering options such as devaluing its currency to make exports cheaper, increasing public spending to stimulate domestic consumption, and projecting itself as a stable investment environment compared to the U.S.

What role does the global south play in China's trade strategy?

China is targeting the global south by offering more trading opportunities and promoting the concept of de-dollarization to reduce the dominance of the U.S. dollar, which many countries in this region find appealing, given the U.S.'s use of the dollar as a geopolitical tool.

How does the geopolitical rivalry between the U.S. and China affect global supply chains?

The geopolitical rivalry has led to a bifurcation of global supply chains, particularly in strategic industries like AI, semiconductors, and biotech, which have national security and economic security implications. Countries are increasingly looking for self-sufficiency or forming coalitions to mitigate risks associated with reliance on either the U.S. or China.