President Donald Trump has started a trade war with China, but Beijing has many ways to respond. Since the rest of the position in January, Trump has raised the tariffs by 20 percentage points on Chinese imports.
He promised to pay this to 60 % or more. Beijing answered with selective counter measures, but if Trump escalates, China has an economic arsenal awaiting.
China returns to definitions and commercial barriers
The United States has more space to impose definitions. In 2024, America imported $ 440 billion of Chinese goods, but was exported only $ 144 billion in return. This commercial gap means Washington’s tariff a more difficult bite. In response, China returned to a tariff of 10-15 % tariffs at $ 21 billion in American agricultural products, directly targeting soybeans who have shipped more than half of their exports to China that year.
Beyond the definitions, Beijing moved to prevent American major exports. On March 4, Chinese organizers suspended import licenses for three American soybeans, including CHS, citing the discovery of harmful fungi. The authorities also banned wood imports, saying that the pests were discovered in shipments. Meanwhile, poultry and poultry suppliers have temporarily seen their customs records, and hundreds of beef exporters are still listed as “expired” in the import database in China.
Beijing has user Similar tactics before. In 2020, the Australian Benknd was detained in customs after the Australian government prompted an investigation into the assets of Covid-19. The latest Trump tariff can lead to the same treatment for American goods. If China begins delaying shipments or banning major American exports, the trade war may quickly intensify.
China transforms the screws on American technology and manufacturing
Beijing does not stop in agriculture. The American technology giants that depend on the China market are in the queue. In February, after the latest rise in Trump, Beijing launched the fight against Google and NVIDIA. The effect was limited, but China showed that it was ready to pursue Silicon Valley. Then a heavy blow came – on March 4, Beijing banned the imports of genes sequence from Illumina, an American biotechnology company. Its shares decreased by 35 % this year, although China only constituted 7 % of its revenues.
Tesla is more weak. The company is $ 800 billion, and China is its largest foreign market. Last year, Tesla from Shanghai Mega-Factory produced nearly half of its global supplies, even with the decrease in US sales. Meanwhile, BYD in China exceeded Tesla in EV sales. If Beijing decides to target Tesla with new regulations, Elon Musk can take great success.
Another American giant at the intersection is Apple. Although the production range in India is expanding, Apple still depends on China for most of its manufacture in iPhone. The company achieved $ 27 billion of operating income from China in 2024 – more than 20 % of its total. If China restricts Apple’s commercial operations or puts pressure on its suppliers, the effect may be devastating.
Beijing knows that cracking procedures for American companies can make China appear hostile to foreign business. But given how Trump’s tariff has strained relations with other American allies, China’s revenge may not lead to an international violent reaction as it will be before.
China market climbing with American stocks slipping
While the American stock market is struggling, Chinese stocks rise. On March 9, the MSCI China index increased by 19 % since the beginning of the year, making it the best quarter in history, according to Goldman Sachs. Meanwhile, the S&P 500 fell into a correction area, which represents the first retreat from this scale since 2023.
For years, investors believed that the American market was uniquely strong while the Chinese economy was risky. But now, the situation was reflected. Richard Harris, CEO of Investment Department at Port Chert, He said“The United States had a good tour, but Trump’s policies are hostile to growth, while China bounces down.”
The heavy nasdaq technology boat has also declined, as it has declined by the wonderful seven stocks-Amezon, Apple, Meta, Microsoft, NVIDIA, and Tesla- with fears of stagnation caused by war.
The Eastspering Investments, Ken Wong, said that the era of the “extraordinary” of the “American” ended in early 2025. With the expectation of the growth of GDP in the United States to less than 2 %, the risk of recession – a mixture of slow economic growth and high inflation – is increasing.
The American economy expanded by 2.8 % in 2024, but Trump’s financial policies and the tariff warfare increase the exacerbation of the American debt crisis. Meanwhile, James Sullivan, head of the Pacific Pacific Research at JPMorgan, said the Chinese market now provides better investment opportunities. The MSCI China index is traded at 13.38X expected profits, while the S&P 500 is in 20.72X.
“The China market has been less than its value for a long time, but the momentum was turning,” said Harris.
China can arm the ground and yuanian metals
If Beijing wants to escalate, the yuan may weaken. So far, the Popular Bank of China has kept stability. But if Trump continues his introductory threat by 60 %, Beijing may allow the yuan by 10 %. Mansor Mohiden, Singapore’s Senior Economist, believes that China will control autumn to prevent chaos, but it may allow the currency to slip to 8.2 yuan per dollar-level before China abandons its fixed exchange rate in 2005.
Nuclear option? Cut rare land exports. These minerals are necessary for semi -conductors, electric cars and military technology. In 2024, China dominates 70 % of the global rare land production, according to the American geological survey.
Beijing has already tested this strategy. On December 3, 2024, all gallium exports to the United States were prevented after the Biden administration imposed restrictions on chips on China. This prompted global gallium prices to an increase of 20 % to $ 663 per kilogram, but the direct impact was limited because most of the Galium China goes to Japan and South Korea, who shipped parts to American companies after that.
The full ban on Chinese gallium will not reduce the gross domestic product by only 3.1 billion dollars – by 0.1 %. But the real threat is to disrupt global supply chains, which can paralyze industries from defense to electric cars.
However, Trump began this trade war, but China has made it clear that it could fight.
Cryptopolitan Academy: Do you want to develop your money in 2025? Learn how to do this with Defi on our next electronic performance. Keep your place
