China Prepares to Endure a Trade War – Foreign Policy

Beijing's Strategic Dilemma

China faces a difficult situation due to escalating trade conflicts with the United States under President Trump. The imposition of high tariffs by the U.S., met with strong retaliation from China, creates a tense standoff. Each potential response presents significant risks. While China may attempt diplomacy, Trump's unwillingness to compromise makes this path challenging.

Potential Responses and Risks

• Enduring the Pain: A protracted trade war might favor China due to higher public tolerance compared to the U.S.
• Escalation: Actions such as hostage diplomacy, boycotts of U.S. goods, or aggressive actions in the South China Sea are possible.
• Bribery: China may attempt to influence the Trump administration through payments or favorable treatment for Trump-linked entities.

The article notes that China's economy, while less reliant on the U.S. than vice-versa, faces risks from a potential global recession.

Other Developments

• Political Purge Rumors: Speculation surrounds the potential investigation of a top Chinese general.
• Financial Investigation: The son of former Vice Premier Liu He is reportedly under investigation.
• Chinese Nationals in Ukraine: The capture of Chinese nationals fighting for Russia raises concerns about Chinese involvement in the conflict.
• Economic Stimulus: In response to the trade war, China might accelerate its economic stimulus package, although public trust and spending remain uncertain.
• TikTok Deal: A deal to sell TikTok's U.S. operations is on hold due to China's disapproval, in apparent retaliation for the trade tariffs.