COMMENTARY_ China blinks on trade war

THE WASHINGTON TIMES

China blinks on trade war

Trump's tariff strategy works, brings two countries together with no U.S. concessions

U.S. tariffs on China illustration by Alexander Hunter/The Washington Times more >

COMMENTARY

By Kelly Sadler - The Washington Times - Thursday, May 8, 2025

OPINION:


After months of flexing, showing no indication that China would back down in a potential trade war with the U.S., Xi Jinping blinked. U.S. and Chinese officials will meet in Switzerland this weekend for bilateral tariff talks.

While the U.S. media focuses on the pain the American consumer will feel in an extended fight with the Chinese because of President Trump’s 145% tariffs imposed on Chinese goods, little has been discussed regarding the economic hardships Beijing would experience and just how much leverage the U.S. can exert on the communist nation.

Mr. Trump understands the U.S. power in this relationship and has been merciless in applying it to squeeze the Chinese leader into better trade deals for the American public. Almost every foreign action Mr. Trump has undertaken — whether it be reclaiming the Panama Canal, talks of conquering Greenland or enacting secondary sanctions on Iran — has been aimed at lessening Chinese influence around the globe.

Overall, exports account for about 13% of China’s gross domestic product. The U.S. is estimated to represent about 3% of China’s GDP. Goldman Sachs calculates that 10 million to 20 million manufacturing jobs in China depend on U.S. purchases.

This week, Radio Free Asia reported unrest among Chinese factory workers, who are demanding back pay and the reinstatement of unfair dismissals after the closure of manufacturing plants because of Mr. Trump’s tariffs. Protests erupted in the streets, and construction workers threatened to throw themselves off buildings last month if their demands weren’t met. China quickly moved to censor these reports from the internet.

In April, China’s factory activity showed its steepest contraction in 16 months, while new export orders fell to their lowest levels since 2022 during the COVID-19 outbreak. Additionally, U.S. cargo bookings out of China have fallen 60%, according to San Francisco-based Flexport, which helps companies ship cargo around the world.

Last week, Capital Economics said the Chinese economy was likely weaker in the first quarter than its official growth figures suggested. It expected the economy to expand by 3.5% in 2025, well short of Beijing’s target of about 5%.

It has become so bad, The Wall Street Journal reported Sunday, that the Chinese government has “stopped publishing hundreds of data points, including land sales, foreign investment, and unemployment figures,” making it harder for outside economists “to know what’s going on in the country.”

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READ MORE: https://www.washingtontimes.com/news/2025/may/8/china-blinks-trade-war/

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