WASHINGTON —
Beijing responded this week to President Donald Trump’s decision to impose another 10% tariff on most Chinese goods, saying it was willing to “fight to the end” in any area of conflict between the two countries. Later, U.S. Defense Secretary Pete Hegseth responded, “We are ready.” However, on Thursday (March 6), Beijing backed off, saying “whether it is a tariff war or a trade war, whether it is a cold war or a hot war, it cannot be fought or won.”
Since the first Trump administration’s “trade war” against China, friction has continued between the world’s two largest economies. As the new Trump administration implements tariffs on China, experts in the economic and trade fields told VOA that Beijing may make adjustments in exchange rates, restrictions on mineral exports, etc. in response, but these measures may not be very effective. However, other experts suggested that China’s leading position in electric vehicle manufacturing may become one of its competitive advantages. Chinese companies coming to the United States to build electric vehicle factories may be a long-term solution.
New tariffs spark verbal battles
A statement by Chinese Foreign Ministry spokesman Lin Jian at a regular press conference on Tuesday (March 4) quickly became international news.
“If the US really wants to resolve the fentanyl issue, it should consult with China on the basis of equality, respect and mutual benefit to resolve each other’s concerns,” Lin Jian said. “If the US has other intentions and insists on a tariff war, a trade war or any other war, China will fight to the end. We advise the US to put away its bullying face and return to the right track of dialogue and cooperation as soon as possible.” The
Chinese Embassy in the United States also specially forwarded this statement in English on its X account.
Lin Jian’s statement was in response to the US’s additional 10% tariff on Chinese goods from Tuesday. Last month, the Trump administration had already imposed a 10% tariff on Chinese goods. The White House said the reason for the tariffs on China was China’s inaction in curbing the flow of fentanyl into the United States.
Lin Jian’s statement immediately made headlines in major international media. A headline on the British National Broadcasting Corporation reads “China says it is ready for ‘any kind of war’ with the United States”; CNBC in the United States also wrote “China says it is ready to fight the United States to the end.”
Hu Xijin, a special commentator and former editor-in-chief of China’s official media Global Times, used similar language to criticize the US tariff policy in a Weibo post on March 4.
“A country cannot win any war against the whole world, no matter what kind of war it is, no matter how powerful the country is,” Hu Xijin wrote, “and the United States is far from being as strong as Trump boasts. Trump will lose!”
Shi Zonghan, a professor of political economy at the University of California, San Diego, took a negative attitude towards Lin Jian’s remarks on X. “This speech is not helpful to China’s interests,” he wrote.
Although Lin Jian did not directly say that Beijing wanted to go to war with the United States, his words still prompted a response from US Secretary of Defense Hegseth. When asked about Lin Jian’s remarks on Fox News, Hegseth said that the United States is ready for a military war with China.
“Those who yearn for peace must prepare for war,” he said. “We live in a dangerous world, and those powerful emerging countries have completely different ideologies.”
But Hegseth also said that President Trump and Chinese leader Xi Jinping have a “very good personal relationship.” He said the two countries will cooperate “where we can be partners, where we can cooperate,” “to realize that we don’t want to go to war with China, we don’t seek that kind of war.”
In response, the Chinese Ministry of Foreign Affairs also responded again. At a press conference on Thursday (March 6), Lin Jian called on the United States “not to mirror China with its own hegemonic logic, and not to view Sino-US relations with outdated Cold War thinking.”
“China’s position is clear and consistent. Whether it is a tariff war or a trade war, whether it is a cold war or a hot war, it cannot be fought and cannot be won.” He said.
What cards can China play in response to US tariffs?
- tariff
In response to the Trump administration’s new round of tariffs, Beijing quickly took three measures to swiftly hit back at the United States. China announced on Tuesday that it would impose additional tariffs of 10% to 15% on agricultural products from the United States starting March 10. At the same time, China’s Ministry of Commerce announced that 15 American companies would be added to the export control blacklist. China also filed a lawsuit against the United States at the World Trade Organization over the additional tariffs.
Jeff Moon, former assistant trade representative for China affairs at the Office of the U.S. Trade Representative, told VOA that China’s tariff retaliation against the U.S. will not be effective because of the large trade deficit between the two countries.
“Because China’s trade surplus with the United States is so large, it cannot impose tariffs one-to-one with the United States,” he said.
- Investigating American Companies
Experts interviewed by VOA previously said that China may retaliate against American companies to counter trade pressure from the United States. In December last year, China launched an antitrust investigation into Nvidia, a US chip technology giant, alleging that Nvidia was suspected of violating China’s Anti-Monopoly Law and the antitrust agreement reached with Chinese regulators during Nvidia’s previous acquisition of an Israeli technology company.
“They are making it difficult for American companies to invest in China, and they have also launched an antitrust investigation into Google,” Maury Obstfeld, a senior fellow at the Peterson Institute for International Economics, told VOA.
However, some analysts believe that punishing American companies doing business in China will not pose as strong a threat as before. At present, China’s economy is in a slump due to the real estate crisis and the sharp drop in foreign investment. Putting pressure on American companies will prompt American companies to reduce their business in China and discourage new companies from investing in China.
- Restrictions on critical minerals
Previously, China also imposed restrictions on some goods exported to the United States, including some key minerals. On December 3 last year, China’s Ministry of Commerce announced that it would impose a ban on the export of key minerals including gallium, germanium, antimony and superhard materials to the United States. This is the first time that China has imposed a ban on these materials with extensive military applications only on the United States.
However, the Wall Street Journal pointed out in an article on December 30 that China’s restrictions on the export of key minerals have caused their prices to be tight in the international market, attracting international competitors to increase investment in this industry and reducing the cost and difficulty for American buyers to purchase them.
- Currency and Treasury Bonds
In addition, China may also take some limited countermeasures at the currency and treasury levels, such as devaluing the renminbi to lower the price of Chinese exports to the United States in response to high U.S. tariffs.
However, Maury Obstfeld pointed out that devaluing the renminbi may not be China’s best option. “In fact, China does not want the renminbi to fall too low to a certain extent,” he told VOA.
He said that the last time the renminbi depreciated significantly was when the Federal Reserve raised interest rates in 2022, after which China “struggled with low growth and capital left China.”
- Building factories in the United States—a long-term solution?
Chris Tang, a professor at the UCLA School of Management, told VOA that in addition to the above countermeasures, Chinese companies can invest in areas where American companies have withdrawn, which may solve the problems between the two countries.
“Chinese companies can consider discussing building factories in the United States like Haier did,” he said. “The situation of electric vehicle companies is so good now, why not build factories in the United States to manufacture electric vehicles? Now General Motors and Ford Motor Company have begun to withdraw from manufacturing electric vehicles.”
He said that even though Trump cut subsidies for electric vehicles, the market is still there. This is a long-term solution for the world.