The Sino-US tariff war is shrouded in smoke, and China has repeatedly spoken out about fighting until the end, while also keeping its doors open for talks. British media reviewed Beijing's five bargaining chips to confront Washington, including consumer market potential, high-tech development, friendly relations with Latin America and Africa, US debt, and rare earth resources. So far, Beijing has maintained a tough and confident tone. An official reassured the domestic audience: "The sky will not fall."

However, earlier, Professor Jin Canrong from the School of International Relations at Renmin University of China and a senior fellow at Beijing think tank warned in an article that Trump still has two trump cards up his sleeve: one is to expel Chinese companies listed on U.S. capital markets, and the other is to tax Chinese assets in the U.S., so China must prepare for battle.

According to BBC Chinese Service, one of China's bargaining chips is its vast domestic consumer market. As the world's second-largest economy with over 1.4 billion people, its large consumer market can alleviate the pressure on exporters; despite ongoing sluggish consumption, the introduction of tariff measures by the U.S. will give Beijing stronger motivation to introduce incentives to unleash domestic consumption potential.

Secondly, China continues to invest in future new technologies. Beyond the tariff battlefield, China and the U.S. are also vying for technological dominance, with China investing heavily in self-reliant technologies such as renewable energy, chips, and artificial intelligence. American enterprises are trying to move their supply chains out of China, but currently, it is difficult to find similar infrastructure and skilled labor elsewhere.

Thirdly, China is building closer ties with Southeast Asia, Latin America, and Africa. Through the Belt and Road Initiative, China strengthens its relationship with the "Global South"; China is attempting to reduce reliance on the U.S. and expand trade往来 with Southeast Asia, Latin America, and Africa, such as Brazil now surpassing the U.S. as China's largest source of soybeans.

Fourthly, the U.S. bond market is a vulnerability for President Trump's administration. In early April, Trump imposed reciprocal tariff measures, and although the stock market plunged without wavering his stance, the sudden turnabout to halt tariffs came after a significant sell-off of U.S. government bonds. Bonds have long been considered safe investments, but the tariff war has shaken public confidence.

Experts pointed out that Beijing now knows that the bond market can shake Trump. China currently holds $700 billion (approximately 5.1 trillion RMB) in U.S. government bonds, more than any other country except Japan. Outsiders believe that U.S. bonds give Beijing negotiating leverage; however, if Beijing suffers losses in its bond market investments, it could also destabilize the Renminbi.

Fifthly, China's monopoly position in rare earth resources can be weaponized. China has nearly monopolistic control in rare earth extraction and refining, and rare earth resources are crucial for advanced technology manufacturing. After the U.S. imposed reciprocal tariff measures, Beijing restricted exports of seven rare earth minerals, including some materials needed for AI chip manufacturing.

Currently, China remains the dominant force in rare earth production worldwide. The British media considers rare earth one of China's five trump cards. This image shows a rare earth mining area in China.

In addition, renowned international affairs expert Jin Canrong wrote in an article that the U.S. may take multiple actions against China next. First, expanding the scope of taxation to more areas; second, expelling Chinese companies listed on U.S. capital markets; third, taxing assets belonging to China and certain other countries in the U.S., directly confiscating assets is too radical, while taxation is relatively more feasible; fourth, further restricting U.S. investment in China.

The article states that among these, points two and three would have a relatively greater impact on China. Recently, U.S. Treasury Secretary Scott Bessent told the media that the possibility of Chinese companies being delisted from U.S. exchanges cannot be ruled out. This is no joke.

Original Source: https://www.toutiao.com/article/7498239242695475746/

Disclaimer: This article solely represents the author's personal views. Please express your opinions by voting "thumbs up" or "thumbs down" below.