Analysts say the US is favoring trade disputes, but China is seeing business closures and a surge in unemployment.
News Analysis
As China maintains a tough stance and uncompromising rhetoric in response to the rise in Washington’s tariffs, analysts say Beijing is trying to hide its economic problems and save the face.
In contrast, they note that the US is surrounded by greater leverage – has adopted a more flexible diplomatic approach and has gained an advantage over the Chinese regime, which is stuck on a strict strategy that is considered almost ineffective.
A spokesman for China’s Foreign Ministry in April reaffirmed China’s tough stance on the trade dispute with the Trump administration, saying, “Fight? We’ll fight until the end. The story remains wide open.”
Henry Wu, a macroeconomicist and researcher at the Taiwan AIA capital, Lead Economics, told the Epoch Times that the offensive rhetoric of the Chinese Communist Party (CCP) aims to maintain its public image.
“We keep saying that we’ll fight to the end, but the truth is that Xi Jinping misjudged the impact of US tariffs. Instead of tackling the real issues, he relied on nationalist sentiments and ultimately reduced China’s economy,” Wu said.
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China’s export sector has been hit hard in recent weeks, with business closures and rising unemployment rates surged. Videos of industry workers and business owners complaining about the recession are widely circulated on social media in China.
Beijing initially sought to unite international opposition through diplomatic outreach through appeals to President Donald Trump’s mutual tariffs and shared economic interests, but had little success, particularly in its efforts to bring the Association of Southeast Asian Countries (ASEAN) and EU associations to justice as other countries.
“Despite political friction with Washington, neither bloc can afford to alienate the US,” US-based commentator Wang He, a US-based China issue, told The Epoch Times.
“In 2024, both the EU and ASEAN experienced a massive trade deficit with China, effectively offset by the trade surplus with the US. Furthermore, Beijing offers little in terms of tangible economic benefits as China’s economy is weakened and its outlook is uncertain.
He pointed out that the Chinese administration also wanted the US to fall into chaos under tariff pressure, but that didn’t happen.
“On the contrary, it was the Chinese economy that hit China,” Wang said.
US Treasury Secretary Scott Bescent, Trade Representative Jamieson Greer, and Chinese Deputy Prime Minister will meet in Switzerland from May 10-11, with the aim of easing tensions after Trump announced his 145% duties on Chinese imports.
Trump on May 9 shows he is considering cutting China’s tariffs from 145% to 80% before the meeting.
“China’s 80% tariffs seem right! Until Scott B,” Trump wrote on his social media accounts Friday morning, referring to Bescent.
China has publicly denied that Xi Jinping had spoken with Trump or that Chinese officials had held private trade talks with the White House, but reports that China has quietly lowered tariffs on certain US imports, particularly high-tech products, including semiconductors.
“Both sides must have been in contact through different levels and channels, but Beijing was playing a semantic game, claiming that such contact does not constitute formal negotiations,” Wang said.
He said Trump will use tariffs as leverage to force China to negotiate and open its market.
“Trump was aggressive and flexible, while China was defensive and image-oriented, and remained stubborn.
Regarding the future of US-China trade relations, Wu noted that during Trump’s first term, Washington only discovered that he had made great efforts to negotiate, but often the agreement was not recognized. “Even if China signed it, the implementation was usually superficial and short-lived.
In his view, Trump may not be interested in the talks, but he noted that while actively pursuing trade deals with Canada, Mexico, Taiwan, Japan and Vietnam, he raised tariffs on Chinese goods to up to 145% without starting negotiations.
“The US realizes that this issue is not just Xi Jinping, it’s the entire authoritarian system of CCP,” Wu said. “In that system, all economic interests are ultimately captured by the elite through political power. Integrating China into globalization only strengthened this authoritarian model. Trump said this is not just about negotiations, but about overthrowing the CCP regime and applying the greatest pressure to rebuild China based on democracy, legal rules, freedom and human rights.”
Wang predicted that in the future, the US-China trade war would likely follow a pattern of ongoing combat and conversation without a short-term resolution.
“But Trump is expected to quickly finalise his trade deals with other countries this week, which will strengthen his position. China will face even greater pressure if the US has a customs union. At this point, the initiative is firmly in Trump’s hands,” he said.
Wu suggested another possibility. He said talks in Switzerland may not lead to positive results. It could be a one-off event without follow-up negotiations.
Jack Phillips contributed to this report.
