Are there any non-secret weapons that China can use to outlive the United States in the trade war? It may appear such. Chinese officials urge young people that, in contrast to fat and slothful Americans, they should learn to bear adversity—or, as the Chinese say, “eat bitterness.”
Because of its autocratic leadership, which tolerates no criticism, decisions should be made more easily and remain in place longer than in a divided America. Additionally, there are other ways for China to negatively impact American businesses, who can be counted on to pressure Washington to take a step back. However, these notions represent an outdated perspective on China and a basic misinterpretation of its political and economic structure.
Consume bitterness? Yes, back when China was much poorer. The Communist Party’s legitimacy is mostly predicated on an implicit agreement that it will raise living conditions rather than lower them, and it currently has the same middle-class ennui as the United States.
What about the ability of a dictatorship to make decisions quickly? Not at all. Options are thoroughly examined and re-examined by Beijing’s intricate bureaucracy before being sent up the chain for decision-making. Despite being the most powerful leader, Xi Jinping seeks agreement from the senior party leaders he appointed.
If anything, the United States is far more analogous to one-man rule than China when it comes to making decisions in the trade war. The fact that Donald Trump can impose, raise, cut, or stop tariffs at his discretion is one reason why he could enjoy them. On issues presented as preserving national security, the courts typically defer as well, and Congress has given the executive branch its constitutional tariff authority.
Of course, China has many options for trying to force the United States to give in, but each one has serious disadvantages. Calling the “abnormally high numbers” a “joke in the history of the world economy,” it can keep on matching Washington’s tariff hikes. Yes. They will crash orders and stop trade since they are so high right now, but don’t expect Trump to see it that way.
Or Beijing might use antitrust investigations, restrictions on Hollywood movies, and the blacklisting of certain American exporters to put pressure on American businesses, which is what they are beginning to do. However, if you push too hard there, the foreign investment that China relies on for technology and jobs, which has decreased since the pandemic, will go.
Next is China’s renowned dominance over the minerals and so-called rare earths that are used in electronics manufacturing. However, American businesses typically don’t purchase the minerals straight from China. Instead, they come in components that are sold to customers in the United States. If Beijing exerts too much pressure, other countries will be encouraged to match Chinese mining and processing subsidies.
And lastly, financial weapons. To lower the cost of its American exports, which were subject to tariffs ranging from 7.5% to 25%, China somewhat depreciated its yuan during the most recent trade war. However, even to partially offset three-digit taxes, the Chinese yuan would have to suffer a huge hit. This would make imports extremely costly in China and lead to a large capital flight as regular Chinese look for methods to exchange their yuan for dollars or euros.
On the other hand, the yuan would appreciate and Chinese exports would become even more costly if China attempted to sell off its hoard of over $760 billion in US Treasury notes, which would raise interest rates in the world’s largest economy. Once more, that is not what China desires.
Even though the ongoing trade war could harm Beijing more, China might attack the United States in any of the numerous methods mentioned. Alternatively, it may remain mostly motionless and wait for the US president to cause the economy to collapse.
The 125% tariffs on the United States’ third-largest trading partner, which produces a wide range of products from iPhones to industrial components and Christmas lights, will significantly increase costs in the US. This may push the nation towards a recession. Furthermore, the poor will be more negatively impacted by tariffs than the wealthy, who can afford higher prices, as is always the case. Customers will be encouraged by Democrats, and possibly even retailers, to view the tariffs as a Trump sales tax.
Regardless of what China does, that alone will put pressure on the US to settle. There’s yet another twist. Chinese producers have a strong incentive to avoid taxes by shipping their goods through a third country because the US currently charges at least 125% tariffs on anything from China and just 10% duties on items from everywhere else. That would drastically cut into the tariff revenue that Donald Trump and other Republicans rely on to support their agenda.
There are strong incentives for both countries to reach an agreement that would at least defuse the trade conflict. According to China’s Commerce Ministry, “dialogue and consultation” are welcome. Donald Trump stated that he wants to talk to Xi Jinping about an agreement. He is using his flattery playbook to get a favourable response, referring to his Chinese colleague as “a proud man” and using other praises.
When all the grandstanding is stripped away, what becomes painfully clear is that a prolonged trade war between the US and China is not only damaging for both nations, it’s strategically unwinnable for China, and arguably for America as well. Despite the tough rhetoric and occasional sabre-rattling from Beijing, the structural weaknesses of China’s economic and political model make it ill-equipped for a sustained standoff.
The myth of China’s resilience, that its people are prepared to “eat bitterness” while Westerners crumble under inconvenience, is outdated. Modern China is not the ascetic, collectivist society it once was. It is home to a burgeoning middle class with rising expectations, consumer habits, and economic anxieties not so different from those in the United States. The Communist Party knows this. Its legitimacy now depends far more on delivering prosperity than ideology, and that leaves little room for policies that cause long-term pain without clear gain.
Even the idea of China’s authoritarian efficiency is more illusion than fact. Decision-making in Beijing is clogged with internal consultation, rigid hierarchy, and factional politics. Xi Jinping, while powerful, still operates within a system where every major move needs to be vetted and approved across multiple layers. Ironically, it’s Trump’s America, where a single person can change tariffs overnight, that acts more like a command economy in this context.
And though China has tools at its disposal, from currency manipulation to export restrictions and political targeting of American firms, none come without serious collateral damage. Weaponising rare earth exports could inspire global competitors. Squeezing American businesses risks scaring off the very foreign capital that sustains China’s innovation and employment. Even depreciating the yuan too much could lead to inflation and capital flight, weakening domestic stability.
The US isn’t invincible either. Tariffs that go as high as 125% will eventually blow back on American consumers and businesses. The poorest will suffer most, inflation could spike, and key industries could face disruption. The political pressure will grow, especially in an election cycle.
Chinese exporters are already rerouting goods through third countries to avoid US tariffs, undermining both the effectiveness of the policy and the revenue that American politicians tout as justification. In this kind of economic chess match, both sides are bleeding, even if one believes they’re winning.
Ultimately, a trade war cannot have a winner when the weapons used cause mutual harm. China may be able to withstand certain blows longer than anticipated, but it cannot emerge victorious without sacrificing the very progress it’s made over the past 40 years.
The United States, for its part, risks recession, division, and long-term damage to credibility. Both sides know this. That’s why beneath the noise, there’s still talk of deals, handshakes, and mutual praise. Because for all the chest-thumping, what both countries really want is not war, but a way out.