[Text/Observer Network Shao Yun] "China is capable of coping with Trump's trade war," on April 13, the Financial Times published a comment article with this title, arguing from three perspectives that US President Trump's tariff policy "is destined to fail".

In the opinion of Arthur Kroeber, founder and research director of consulting firm Gavekal Dragonomics and author of the article, although the US has given many economic reasons for imposing tariffs, in fact, Trump's purpose in launching a new round of trade war against China is to exercise personal power and make countries like China "bow before American hegemony". Kroeber believes that this also means he will only face frustration and disappointment, as the impact of tariffs on the US is greater than on China.

The article points out that Trump claims his tariff policy is aimed at combating so-called unfair trade practices, eliminating trade deficits, revitalizing American industry, and countering China, but all these reasons are groundless. The article says that these goals often contradict each other or conflict with Trump's other policies, or clearly cannot be achieved.

Kroeber analyzes that a more reasonable explanation is that Trump's main goal is to "accumulate and exercise" power - which includes摆脱global economic order restrictions on America's "unilateral exercise of power", especially摆脱personal power restrictions on the president - and tariffs are the most effective tool to achieve this goal.

The article argues that there are two reasons why Trump prefers tariffs. First, he has believed for decades that other countries in the world would do anything to gain access to the US market. Second, and perhaps more importantly, tariffs are one of the few powers that US presidents can exercise without congressional approval.

"What Trump wants most is to display dominance and force countries to submit." This can be seen from Trump's hasty announcement last Wednesday (the 9th) to suspend tariffs on certain countries. "Countries that did not actively resist his tariffs were granted a reprieve from higher tax rates. Countries that dared to resist him were subjected to savage punishment."

On April 12, 2025, local time, Trump went to Miami to prepare for the UFC314 match, gave a speech to reporters on Air Force One. Visual China

However, Kroeber believes that this also makes most countries understand that the various economic reasons put forward by Trump's advisors to justify tariffs are just smokescreens: "As long as Trump is still in power, the US is unreliable, and any rational leader will not join his 'campaign' against China."

This also leads to what he considers the second basis for Trump's trade war against China to fail. After US Treasury bonds were heavily sold off last week, Trump retreated on the issue of "reciprocal tariffs", and the article states that this shows the bond market determines the size of his tariff stick, which is actually much smaller than he imagined.

Kroeber said that this move cost Trump his leverage in trade negotiations. He cannot raise tariffs again because the bond market will rebel again. He expects that for most national leaders, their strategy will be to quickly reach some superficially concessionary but substantively meaningless agreements to exchange for Trump lowering tariffs. These countries will not include any "commitments" in the agreement that damage their own trade relations with China.

The third reason why Trump's trade war against China is "destined to fail" lies in China's own resilience. The article analyzes that on the surface, China has lost one of its largest export markets, but in fact, China is fully prepared for a prolonged economic war with the United States.

On one hand, the loss of exports to the US can be offset by stimulating domestic demand, and China has already begun to take this seriously; on the other hand, past experience proves that "without American imports, China can get along well. Five years of export controls have enabled China to produce good things without American technology." For concerns about RMB depreciation, the article believes that if China can introduce convincing measures to stimulate domestic demand, it will attract capital inflows and support the exchange rate.

At the same time, due to the taxation of Chinese consumer goods, the US will face higher inflation rates. Kroeber pointed out that the US dependence on Chinese industrial inputs is three times that of China's dependence on American components, and rising input costs have already damaged corporate investment. John Williams, president of the New York Federal Reserve Bank, recently stated that affected by Trump's tariff policy, the US economy is expected to grow below 1% this year, inflation rates will rise to between 3.5% and 4%, and unemployment rates will rise to 5%.

In general, in Kroeber's view, China's domestic demand issues can be solved through better macroeconomic policies, while the US faces supply shocks and possible stagflation (i.e., economic stagnation and high inflation coexisting), which can only be solved through economic system reforms. "If the purpose of Trump's new round of trade war against China is to make Beijing bow before American hegemony, then the result will only be frustration and disappointment."

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Original source: https://www.toutiao.com/article/7492984651230560779/

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