Frank Yuan
Postdoctoral Research Fellow

China has held firm in the trade war and the effort is bearing early fruit. A few hours ago, Trump indicated that a deal with China was now in the works, so that both sides would retreat from their egregiously high tariffs and return to some normalcy. He even promised to be ‘very nice’ in the negotiations (read it with your inner Trump voice).

Remember, Beijing has responded to every step of Trump’s escalation with its own proportional retaliation, including measures which could really hurt, such as restricting rare-earth exports. Washington is shown to have a limited tool-kit – mostly raising tariffs on everything that American consumers and even manufacturers need. Masterful gambit.

Beijing has always maintained it’s open to negotiations, and Trump seems to have now steered towards that off-ramp. Crucially, though, Beijing has refused to make pre-emptively compromises. It seems that a ‘strongman’ like Trump does, after all, respect strength.

There is no sign that China would eagerly return to the previous ‘normal’ – it has already moved to boost its trade links with its regional neighbours, all of whom having been in Trump’s firing line as well; it is intensifying diplomacy with Europe, too, whose leaders now also seem more receptive to cooperation with Beijing. Additionally, it has been ramping up domestic economic stimulus so its producers can further move away from relying on export markets. After all, why keep subsidising the lifestyle of the superpower who wants to contain you?

There is much to be learned from their disciplined, wide-ranging, and coordinated approach to statecraft on display here, based on a firm grasp of their own interest and even those of other countries.