[By GuanchaNet Columnist Jiang Yuzhou]
Since the start of Trump's aggressive trade war three months ago, and with the "reciprocal tariff" announcement nearing one month, China has consistently responded firmly from the very beginning without conceding an inch, completely disrupting Trump's rhythm and causing a complete disconnect between the tariff implementation effect and the initial grandiose rhetoric:
Trump originally claimed he would "not exempt tariffs," but this assurance was valid for less than 72 hours; Benset and Lutnick said "70 countries lining up to sign agreements," yet now even G7 countries are not buying it. As for "waiting for China to call," it has sparked unprecedented ridicule both domestically and internationally. The superpower is daily performing various acts that humiliate its dignity, causing domestic economic fluctuations, especially in financial markets.
After Trump's hype, the whole world knows he can't reach China by phone. Network image
However, the more so, some underhanded tactics that could disrupt rules are being discussed shamelessly by American politicians, including but not limited to attempts to block Chinese shipping, pressuring relevant countries to terminate cooperation with China, and particularly recently, US politicians proposing that various countries restrict trade with China in exchange for US exemption. The Ministry of Commerce commented, "Appeasement cannot bring peace, and compromise will not earn respect."
At this moment, the Trump administration, facing a triple blow to stocks, bonds, and currency, is always vague, frequently throwing out olive branches, saying they will significantly reduce tariffs on China and are optimistic about subsequent negotiations. So, how should we view the unpredictable nature of the Trump administration? Where will this trade war head?
First, characteristics of the trade war during Trump's second term:
We must first clarify one point: Trump's current "peace-seeking" is insincere. From a superficial perspective, he still emphasizes that the additional tariffs imposed on us cannot be entirely revoked, and Besant once again reversed his stance within 24 hours, claiming that the report about reducing tariff rates was inaccurate, and negotiations would take 2-3 years.
China's attitude has always been clear: for such "empty promises" that violate equality, respect, and reciprocity, and which flip-flop at any moment, there is no possibility for negotiation.
Moreover, it is highly probable that the US government is trying to soothe its own financial market after getting into trouble, leaving even less reason to dance along.
Deeper down, the underlying reason lies in the operation mechanism of the entire Trump administration, where initiating a trade war is an inevitable matter.
The trade war Trump is currently waging against China and the world is not just a trade war of these past 100 days; it is an integration over quite a long historical period, spanning eight years and crossing two parties and three administrations, featuring the following characteristics:
Firstly, "chaos," applying outdated laws to new situations with extremely complex reasons. Laws authorizing the president to impose tariffs, such as the Trade Expansion Act of 1962 and the Trade Act of 1974, were enacted more than fifty years ago, and there is severe overlap among different laws. How evidence is gathered and procedures followed can be manipulated by the US government as needed. Any label such as industrial subsidies, intellectual property "plagiarism," trade imbalance, or even vague ones like "endangering local industries" or "discriminating against American goods" could become excuses for the US to impose additional tariffs.
Different methods used by the US to impose tariffs. Image source: Yuyuantan Tian
Now, Trump is not only abusing the International Emergency Economic Powers Act without congressional review and investigation hearings but also, as I predicted earlier, he is willing to declare a national emergency to impose "reciprocal tariffs." In specific products like port logistics and semiconductors, he is initiating investigations under Section 301 and Section 232, and the so-called "American legal system" has become a tool for Trump's "tariff governance."
Secondly, "isolation," in actual operations, greatly strengthening the power of administrative agencies, especially the president, with insufficient supervision. According to the US Constitution, Congress is the true entity holding the power to levy tariffs. However, through a series of bills, the president gradually overrides Congress. Whether these powers can be used professionally and prudently depends almost entirely on the president and the administrative team's personal qualities and ethics. The so-called "institutional constraints" have long ceased to be binding.
As early as 2018, the US Congress attempted to limit the president's power to impose tariffs. Trump's current abuse of laws and the behavior of imposing tariffs with a tweet have caused a huge stir in American legal circles. However, the so-called "congressional legislative power" remains inactive, exposing the fallacy of the "separation of powers." Trump has been threatening Republican members of Congress for years not to support re-election, directly burning the exposed canvas with gasoline and oil, making the metaphor of "rubber stamp" and "puppet" for the US Congress and members increasingly appropriate.
Thirdly, "abuse," the US government is abusing administrative power in tariff issues and overall trade policies, with "arbitrary enforcement" becoming increasingly prominent. For example, taking the investigation of Chinese imports based on Section 301 in 2018 as an example, before the investigation and evidence collection were completed and the hearing was held, Trump had already issued opinions on imposing tariffs, preemptively "setting the tone." The so-called investigation and evidence collection are increasingly becoming formalities.
After Trump re-entered the White House, the above tendency has further intensified, not only arbitrarily indulging in administrative procedures but also involving miscellaneous reasons for imposing tariffs: trade deficits, non-local production, refusal to accept immigrants, fentanyl management, reducing dollar settlement... Everything seems to lead to taxation.
Fourthly, "binding," US tariff policies are increasingly not used in isolation but are bundled with other trade protection measures. Now, America's protectionist policies have formed a combination punch. As long as they are labeled as "maintaining national security" or "protecting workers' interests," it is not just about imposing tariffs; it also involves tightening quotas, technological sanctions, restricting exports of key components, and even threatening to freeze assets of other countries. This combination is used to strike specific countries' maritime transport and shipbuilding industries and force Panama and others to abandon contracts to exclude foreign enterprises' legitimate port operating rights, openly threatening related countries' sovereignty. The dark heart of "if I'm not good, neither are you" and disrupting global supply chains is clearly revealed.
Fifthly, "hegemony," America is increasingly indulging in its own protectionism, and its "long-arm jurisdiction" is becoming more and more rampant. In recent years, America's arbitrary law enforcement has crossed borders, turning into "spreading grievances everywhere." Just a sentence, "America didn't make money," Trump's first administration was willing to paralyze the WTO's appeal body; just a sentence, "ensuring supply chain security," even allies' leading enterprises will be forced to set up factories in the US. These have far exceeded the normal scope of power exercise by a sovereign state, not only distorting international trade but also shaking the original global order.
As our Foreign Ministry pointed out, "The US places its domestic law above international law, which is the greatest source of chaos in the international order."
Sixthly, "density," including protectionist measures such as tariffs, not only are they increasingly frequent but also their means are becoming increasingly dense. America's current series of "long-arm jurisdiction" are constantly tightening regulations and technology. For example, the US-Mexico-Canada Agreement requires 75% of auto parts to be produced in North America, and US Customs uses digital tracking systems with blockchain technology to verify the compliance of the entire production supply chain. Starting last year, to prevent foreign steel and aluminum enterprises from evading tariffs through third countries like Vietnam and Mexico, importers are required to provide detailed proof of smelting, casting, and other production stages.
Ironically, America's increasingly dense policy design exposes the inefficiency and disconnection between upper and lower levels in grassroots execution. As early as February, the command to cancel small package tariff exemptions collapsed customs, leaving many packages stranded. In April, the introduction of the "reciprocal tariff" and subsequent "exemption" policies, with frequent changes in orders, caused customs to collapse, revealing many problems in terms of capability, manpower, technology, and willingness in the execution level.
So, what led the US government to adopt such unreasonable and self-destructive methods in the trade war?
Secondly, the deeper mechanisms and structural contradictions of this round of trade war:
If I were to summarize this round of trade war in one sentence, it would be that the accumulation of micro-rational behaviors eventually leads to collective fallacies.
Last summer, when this column opened, coinciding with the US election, we initially tracked Trump from his victory to his inauguration based on the platforms of the two parties, analyzing his policy orientation and fiscal-economic logic, and long ago concluded that he would escalate the trade war and that there was no room for illusion.
In short, the trade war has reached this extent not just because of Trump's team's whims, but due to profound historical context, conditional constraints, and fundamental driving forces, thus the waves will be extraordinarily turbulent.
Firstly, this is a tool that the critic must resort to to legitimize his governance. Trump's rise to power was not because he was good but because the Democrats performed terribly. All Trump needs to do is concentrate fire on prices, public safety, and unemployment, then swear to fix them, and he will gather supporters like clouds.
Once in office and transitioning to governance, every step becomes a pit: boasting that he will issue bills and fix prices within 24 hours, but even the price of a single egg can skyrocket; wanting to improve manufacturing efficiency, but long-term laggard labor unions are still his voter base; claiming to improve government efficiency, but lacking the courage to fight corruption, instead staging tragicomedies of forcing grassroots civil servants to buy out their service years... There are also large-scale tax cuts, infrastructure development, residential construction, and scientific investment, all requiring the question, "Where does the money come from?"
When Trump responded to the skyrocketing egg prices in February, he could still blame Biden. What about now? And in a few months?
During his campaign debates, Trump used to blurt out "tariffs are enough to pay for it," but the fact is far from it. According to estimates by the Tax Foundation of the United States, if Trump fulfills his tax cut promise, federal tax revenue will decrease by $4.5 trillion over ten years.
And according to calculations by the Peterson Institute, even if all countries collectively lie down in the trade war and let the US run wild with a 15% tax rate, federal revenue growth over ten years would not exceed $3.9 trillion and would offset the tax cut policy internally. Once retaliatory measures are taken, the increase in revenue will shrink to less than $1.5 trillion.
And this is the only relatively reliable major source of income in the short term.
Even more dramatic is the debt sector. The pressure on US debt is already an open secret. The US is now spending more on interest payments than on healthcare and defense, and it continues to rise rapidly.
Trends and forecasts of various expenditures in the US. The red line represents interest expenditure.
Experts had already shown Trump calculations and charts back in 2017, predicting that US debt would reach a critical point in 2027. At that time, Trump said, "By then, I won't be President of the United States anymore."
No one's life is predictable. In theory, the President of the United States in 2027 should still be Trump...
Therefore, the Trump administration, caught between a rock and a hard place, has an anxious rhythm in its tariff imposition. It's not just about collecting taxes; after collecting them, it wants to pressure various countries to negotiate and reconstruct trade relations. It tries new forms of extortion around industrial transfer, dollar settlement, and US Treasury bond增持, with rumors of the "Mar-a-Lago Agreement" spreading widely.
To make this extortion appear serious, Trump has completely discarded facts and blamed the world for stealing American industries, jobs, and income, saying he is fighting them, soothing supporters, and shifting internal contradictions accordingly.
It's really crazy, but it's also driven by reality. It's not just about whether the team is amateurish; it's the best material for "defining the situation."
On the flip side of this is the "Dionysian revelry" in ideology, paying homage to Western traditional political culture. There was a tradition of holding festivals to win popular support in Roman and Greek times. The trade war is precisely Trump's festival prepared for the "redneck" base, who have received little education and are poor at reasoning, under the fabricated external conflict.
Because the government cannot offer truly fundamental solutions touching the essence of the economy and the superstructure, Trump, who came to power as a critic, cannot truly transform into a domestic builder but is determined to become a critic of the entire world and launch a "witch hunt" against various industries and countries worldwide.
According to the logic of the US government, anything daring to surpass the US must be "stolen," and tariffs, sanctions, and even trials must be arranged in sequence until it relocates to the US. Trump has repeatedly said, "As long as you settle in the US, there will be no more tariffs."
And once such actions occur, they are immediately portrayed as "the president has won again," "how much wealth and employment have been brought back," igniting so-called "pride" and brewing greater plundering for celebration in the self-proclaimed "golden age," distributing spiritual opium to the base, and the brazen plundering in pirate culture is rendered to a crescendo in these successive provocations of trade wars.
The White House website is now filled with such nauseating flattery, providing vivid annotations for the "Dionysian revelry."
Thirdly, the strategy and technique of reconnaissance fire. Trump is well aware that the US, with its hollowed-out industries, mounting debts, increasingly PPT-driven science and technology, and aging military equipment, will face what kind of future. Therefore, he must accelerate the search for bloodsuckers while using the remaining cards in his hands as a superpower.
Thus, we find an interesting phenomenon: the more countries negotiate with Trump, the more they are mocked as "kissing up" and lose dignity. More importantly, they are more likely to receive various bizarre exemption conditions:
After India's visit to Washington, there was a follow-up request to confirm when they would cut their own tariff rates. If the Indian government does not announce it, the US government announces it on behalf of India, occasionally announcing big news ahead of the Indian government and media that India has agreed again today.
Australia has maintained a large trade deficit with the US for a long time, investing hundreds of millions in the nuclear submarine project and clearly stating it will not retaliate in the trade war. As a result, it will be subjected to rounds of torment, starting from steel and aluminum, then "reciprocal tariffs," and reportedly, agricultural products next...
One of our Southeast Asian neighbors, whose trade surplus with the US constitutes a significant portion, upon hearing about reciprocal tariffs, had its top leader personally call to talk about zero tariffs. The Americans were deeply moved by this, hung up the phone, and raised new demands, requesting that the country also eliminate all surpluses with the US and move several weaving and sewing machine production lines back to the US...
In this situation, the trade war has become a pH test paper for the US to detect countries' obedience. Those who submit easily are more likely to be repeatedly kneaded. The deeper logic behind this is that the fundamentals require the US government to prioritize "America First" in trade, industry, US Treasury bonds, and currency, eating everything dry and clean.
The Trump administration, due to its lack of achievements, has become ravenous. Whoever comes to present gifts first will be eaten dry. Network image
Moreover, Trump's offensive in the trade war operates on two independent lines: one along commodities and the other along countries. A third battlefield may emerge from supply chains in the future. Thus, today it seems certain countries are exempt from tariffs, but tomorrow a different category of commodities will continue to threaten additional tariffs. The so-called "exemptions" exempt the US from obligations but harm the prospects of various countries.
Just two days ago, seemingly "reciprocal tariffs" have been exempted for a large part, but the Trump administration decided to impose high tariffs on solar manufacturers in Malaysia, Cambodia, Thailand, and Vietnam, with rates as high as 3,521%.
Meanwhile, Chinese representatives were denouncing the US for imposing tariffs even on Haiti at the United Nations, using phrases like "how brutal, how absurd, how tragic" to express their feelings directly.
"Today cutting five cities, tomorrow cutting ten cities, then having a night of peaceful sleep. Upon waking and looking around, more Qin troops have arrived." Ancient people have vividly described what happens when extreme pressure is applied and one is still immersed in appeasement fantasies!
The urgency of the US domestic situation to suck blood, combined with the pressure to fulfill election promises due to the Trump administration's lack of achievements, and the deformation of actions caused by promoting political novices based on "loyalty for competence," form a huge black hole, ensuring that sliding on this path not only fails to bring honor but also leads to self-inflicted humiliation.
The best choice is for countries to strengthen coordination, and larger economies and key energy and industry holders to retaliate. Even smaller economies can handle the "one-size-fits-all" situation with feigned compliance and wait-and-see strategies. The more delay, the more obstruction.
Because the biggest problem the US faces now is the decline in its hematopoietic function. With 25% of global GDP, it has bred a stock market with a market value ratio of 65%, and the interest expenditure is approaching 15% of fiscal expenditure. The so-called "manufacturing return" shows no signs of improvement, and the scene of combining advanced technology with the real economy is decreasing day by day, which will impact the dominance of the dollar.
If there is no external new blood and hot money, the employment, income, and prices most closely related to US livelihoods will further imbalance, leading to inflationary pressures that will further hinder possible interest rate cuts and exacerbate the US fiscal crisis.
From the economy to politics, the seemingly "three-in-one" Trump administration will bear infinite joint liability for this situation. After the crushing defeat in last year's election, the opposition forces regrouped in hiding and are ready to rally voters by criticizing the status quo, just as Trump did in the past.
At the same time, as the economic situation worsens and grassroots pain intensifies, Trump's "Golden Finger" for appointing congressmen will gradually lose its effectiveness. The suppressed congressional forces are likely to join forces with external opposition forces, launching a stronger backlash wave than in 2018 from the legislative level.
This gathered force will start with midterm elections, gradually seizing Trump's current power and escalating party strife in the US.
Moreover, I have always believed that the party struggle between Trump and the establishment is unlike any other. Due to the disruptive impact of the MAGA movement's self-contained system on American politics and its enormous political energy today, ultimately confronting it will exacerbate internal divisions in the US, forming two Americas—the "MAGA America" versus the "Establishment America"—and spreading to the entire Western world influenced by the US. Countries we often bow to in Europe and elsewhere will resist the Trump administration far beyond expectations because their backing is "Establishment America."
The mechanism by which these internal contradictions in the US intensify provides greater possibilities for this cross-ideological and cross-realistic collaborative resistance.
Trump believes that the result of disrupting global markets is the formation of a "US Trade Circle" that is increasingly taking shape. Image source: Yuyuantan Tian
Thirdly, why China can say "no" firmly to the trade war:
In less than 100 days of Trump's second term, China has resisted the US-initiated trade war for a full eight years. As the People's Daily stated, the Party Central Committee had anticipated this round of trade war early on, with sufficient estimation of the impact and ample lead time and surplus in response plans.
It is precisely in a series of previous articles in this column that I analyzed China's unique resilience as a super-large economy from perspectives such as switching development momentum, scale effect, expanding foreign trade but reducing dependence, capacity utilization, and incremental policy packages.
This resilience is not limited to resilience against blows but is entering a turning point from resistance to counteroffensive, from catching up to leading. Today, China's manufacturing output exceeds the total output of the top 10 industrial nations globally, with a market share of many end products exceeding one-third or even half of the global market. In the top 20 global science and technology innovation centers, the number of China's preserved quantity has caught up with the total of Europe and America, and the share of ASEAN + BRICS in China's export trade exceeds that of the US + Europe + Japan and South Korea...
Comparison of export volumes to major economies between China and the US in 2024 (unit: billion USD). Except for a few countries, China has achieved a crushing victory. Behind this crushing victory is massive production capabilities, and as written earlier, this manufacturing powerhouse is welcoming the "eastward shift of science and technology." Chart source: Author's自制
With absolute strength as the foundation, China's response to the Trump 2.0 trade war has been measured, confident, and composed. Before Trump signed the executive order to impose additional tariffs, China had clearly expressed its rejection of blackmail and showed goodwill by various departments and levels successively stating that they do not deliberately pursue a trade surplus.
After confirming that the Trump administration was determined to proceed unilaterally, China quickly launched countermeasures. The first wave of countermeasures in February was a "four-pronged attack," where the tariff countermeasures even set tax rates higher than those of the US. However, for the two largest categories of goods where the US has the largest surplus with China, only energy was taxed, and agricultural products were spared, as a final gesture of persuasion.
With the US's "reciprocal tariff" coming into play, China's new countermeasures are a "ten-pronged attack," covering reciprocal tariff rate countermeasures, export controls on key minerals and strategic materials, an unreliable entity list, industrial competitiveness investigations, restrictions or bans on specific US company products... Not to mention the yet-to-be-completely-launched countermeasures on service trade.
At this stage, the US that China is countering is no longer the superpower that won the Cold War and dominated the globe thirty years ago. I have repeatedly mentioned that "scientific and technological industry presentations can deceive, but import-export structures cannot." Today, the proportion of primary products in the US's export structure is increasing. The proportion of agricultural products, energy, metals, and basic raw materials has grown from less than 28% in 2000 to 43% in 2023, with nearly half contributed by energy, including shale gas.
This not only indicates the accelerated hollowing out of the US industry but also means the US is increasingly replacing itself in the international market. However, consciousness often lags behind reality, and old ideological stamps often interfere with rational judgments worldwide.
Therefore, China's countermeasures during this phase, which balance principles and techniques, have profound historical significance. In each round of countermeasure rhythm, the US decision-making layer is left helpless, desperately seeking a phone call but unable to get one; the US society gradually enters panic, with a new threat of inflation looming; even the US financial market falls into chaos, experiencing rare stock-bond-currency triple losses, and the recession trend becomes increasingly clear. It will also gradually relieve the panic worldwide, prompting countries to engage in separate negotiations with the US and even regional collaborative resistance.
As a super-large economy, China's role in countering the US trade war has been universally recognized as a pillar of support. Trump's repeated cries for "call me" have turned into a joke relief in the tense rhythm, greatly encouraging various countries. Not only has it guarded the bottom line of opposing economic hegemony, but it has also safeguarded the bottom color of opposing hegemonism and power politics.
More importantly, it injects a new credit into the currently murky international situation, inspiring new possibilities for the future.
I still remember the bold words of the CCTV Total Commentary during the initial stages of the trade war:
"What kind of array hasn't the Chinese nation seen after enduring 5000 years of storms?"
"China will surely remain firm in confidence, face difficulties head-on, turn crises into opportunities, and fight for a new realm."
And our stepping up to each phase of the trade war has added new possibilities to this "new realm":
In the trade war during Trump's first term, we realized the instability in the international political and economic order under the interference of American hegemony. On one hand, we fought to promote harmony with the US, completing the first phase of the China-US trade agreement to gain time for our own development; on the other hand, we strengthened regional multilateral cooperation with greater intensity and scale, enhancing China's presence in related scenarios from products to currency, laying a solid economic foundation for cross-regional coordination and cooperation.
In the continued trade war during the Biden administration, which seeks to "encircle and block" China with a "small yard high fence," we began activating the dual circulation, not only elevating industrial and agricultural production and foreign trade but also providing vast scenarios for science and technology. The breakthroughs in fields previously "blocked" are now reported frequently, with complete breakout just a matter of time. We are continuously deepening a comprehensive output of commodities, capital, technology, infrastructure, maintenance, and logistics, with the application scenarios of the renminbi also improving. An independent payment and settlement system is being built...
It is precisely through such layers of accumulation that the US has fewer and fewer cards to play in the trade war.
However, the reduction does not mean nonexistence. There is something we need to be highly vigilant about—when there are no cards to play within the existing system, it is likely to stimulate the Trump administration to overturn the system. The ongoing Section 301 investigation into shipping logistics is one example; the US threats to Panama and other countries' sovereignty, coupled with BlackRock's recent attempt to forcibly acquire Hutchison Ports, is another; Australia has followed suit, recently attempting to abandon contracts midstream with Chinese companies operating Darwin Port, another example; not to mention various forms of technological blockades and potential future impositions similar to the Navigation Acts hundreds of years ago...
Limited by space, I will not enumerate further. In short: never overestimate the moral底线 of the Anglo-Saxon imperialists. A single sentence, "We underestimated you too much," explains everything.
"There are no winners in a trade war," we will also suffer casualties, but while we pay the price, we are building our new economic great cycle based on such strong production capacity, strength, and credibility. We are confident in promoting the global effect of this great cycle, and whoever dares to isolate themselves will be closed to the outside world.
In response to the new direction of US provocations at this stage, in addition to traditional trade war economic tools and technological breakthroughs, I believe we need to further strengthen the construction of strategic delivery capabilities. This not only involves increasing the scale of naval and air force units and maritime law enforcement forces but also ensuring that the cruising distance and intensity of these forces match their scale.
This is not only a direction to "break" possible new provocations from the US but also to prepare for the "establishment" after the US isolates itself from the global system. Under the guarantee of hard power, we can provide more Chinese propositions and corresponding public goods for the global order.
In my previous article about US military spending, I have already calculated the shrinkage of US naval and air forces in the next decade through annual equipment update plans and cross-checked this judgment from military, shipping, legal, and other fields with various industry experts.
At this historic moment when China is transitioning from catching up to leading, our struggles also need to transcend the scope of mere contention and move toward construction that aligns with the development patterns of the next phase of the global order.
There's a popular saying, "Our future is the stars and oceans," and the scale has never fallen into the competition with specific countries.
In this process, every provocation from the US will gradually become self-isolation and backwardness, losing importance over time. Eventually, if there is a day when it is eliminated by history, it will be self-inflicted and irrelevant to us.
In the end, we are not only a super-large economy but also the world's first modernized nation with a population of one billion in history. In the process of achieving industrialization, we actively embrace informatization, and the scale effect thus generated will be unprecedented. What we see now is just the beginning.
The trade war is merely a roaring fire that tests the true gold, making it shine brilliantly and attracting everyone's attention. When the oxygen burns out, the fire will naturally extinguish itself and be ignored. Yet the gold remains, becoming more valuable due to the fire.
Thanks to the trade war, the performance of gold during this period coincides with the metaphor at the end of this article. Image source: Tonghuashun
This article is an exclusive piece by GuanchaNet. The