China’s tariffs on American farm products came into force this week. As a response to Washington’s latest 10% hike on Chinese imports, Beijing’s official message has been clear: it is ready to fight any type of war against the US.
As a businessman-turned-politician, US President Donald Trump is using a combination of tariffs, sanctions and rhetoric to coerce countries into complying with his demands.
His “Art of the Deal” approach has worked in some cases, as seen in accommodations made by countries like Canada and Mexico that have sought to negotiate his tariff threats.
But China, while still leaving room for negotiation, is taking a different approach – rather than begging for Trump’s trade war mercy, Beijing wants to interact with Washington on an equal footing.
Indeed, the Trump administration has chosen the wrong target if it thinks its tariff threats will work the same on China.
Divergences between the world’s two largest economies are inevitable. But Washington has made a slew of unreasonable demands on Beijing, leveraging its presumed power advantage and vast gap in comprehensive strength. But China is no longer what it was.
Data from the US-based Center for Strategic and International Studies think tank and the World Bank shows that China’s nominal GDP is the second-largest worldwide after the US, but measured at purchasing power parity, China’s GDP is now larger.
The shift in global power dynamics, where China is rising and the US is declining, is by now a widely accepted fact. China has already made it clear that the US can no longer speak from “a position of strength.”
As a result of its recent rapid growth, China has seized economic advantages over the US in many fields. Take, for instance, trade. The Australia-based think tank the Lowy Institute found that around 70% of the world, representing 145 economies, trade more with China than they do with the US and more than half of all economies trade twice as much with China compared with the US.
China’s lead over the US in international trade relationships, as the Lowy Institute reveals, has widened since Trump initiated his last trade war with China in 2018.
Yet, China is open for talks. At the same time, it has reason to “fight any type of war” until the end and has confidence it will win over the US if Trump insists on a trade war. Trump wants to use tariffs as a card to coerce China, but the US does not have as much leverage as it seems to think it does.
Consider this: In 2024, China imported US$29.25 billion worth of US agricultural products, a decrease of 14% from 2023. Meanwhile, the 2023 import volume had already declined by 20% compared to 2022.
But this has not weakened the significance of the Chinese market for American farmers – China remains the largest market for US agricultural exports. As the US-China Business Council has stated, US agriculture and livestock exports to China support more American jobs than any other sector by a wide margin.
The China-US tariff fight, as Ole Hansen, head of commodity strategy at Saxo Bank, argues, “will continue to increase China’s dependency on Brazilian corn and soybeans while causing a great deal of stress among US farmers who are about to make their spring planting decisions in the coming weeks.”
Trump has repeatedly boasted about the “benefits” that tariffs would bring to American farmers, but in reality, Trump’s red-state voter base is bearing the brunt of China’s retaliatory tariffs ranging from corn to chicken.
Apart from farmers, blue-collar American workers who elected Trump into the White House will also suffer. “More than 550,000 workers at car dealerships representing international brands risk losing their jobs if the industry falters due to the tariffs,” the American International Automobile Dealers Association said in a statement.
The Peterson Institute think tank estimates that the direct cost of import taxes on goods from China, Mexico and Canada will add over $1,200 annually to the typical American household’s expenses. This figure could increase further after reciprocal tariffs are implemented in April.
This is happening while the US is already struggling with stubborn inflation and rising risks of a recession. The country’s CPI rose 3% from a year earlier, according to the latest US Bureau of Labor Statistics.
Trump’s new tariffs, as S&P Global Ratings estimate, could cause a one-time 0.5 percent to 0.7 percent rise in US consumer prices, provided they remain in place throughout the year.
This means that to win over China in this tariff fight, Trump – under pressure from his voter base and rising inflation –lacks the leverage he claims to have.
His “Art of the Deal” approach of using tariffs to coerce China into complying with his demands will eventually backfire on the US. He should have carefully evaluated the strengths of his rivals, including China, and all the risks and pain his country would face before launching his tariff fight.
Jianxi Liu is a Beijing-based analyst of political and international relations and contributor to Chinese news organizations including Global Times, CGTN and others.
