Xi Jinping wants you to know that he will not be cowed.
Confronted with the latest threat from President Trump of an additional 50 percent tariff on Chinese goods unless Beijing reverses its retaliatory levies on U.S. imports, China’s top leader has remained defiant. His Ministry of Commerce on Tuesday accused the United States of “blackmail” and declared that Beijing would “fight to the end.”
But behind the bravado is a more complicated set of realities for Mr. Xi that makes it politically and economically untenable to offer concessions to the country’s single largest trading partner and chief rival for global influence. With Mr. Trump also refusing to back down, a devastating trade war between the two largest economies may be inevitable — a showdown with painful consequences that will be felt across the world.
The dilemma for Mr. Xi is that looking weak is not an option, but hitting back risks further escalation. The Chinese leader has cast himself as a national savior who is rejuvenating his country’s greatness. As a result, Beijing has less flexibility to back down from a fight with Washington, as other U.S. trading partners like Vietnam have tried, because it could undercut Mr. Xi’s legitimacy, analysts say.
“Beijing’s response to date has emphasized three things: resolve, resilience, and retaliation,” said Julian Gewirtz, a former senior China policy official at the White House and State Department under President Biden who is now writing a book on U.S.-China relations.
“Xi has built up an image of himself as a defiant strongman helming a powerful country, and China’s official messaging is conveying that they are determined to stand up to U.S. pressure even at high costs,” he said.
That helps explain why China scuttled a deal to sell a portion of TikTok to American investors last week in response to Mr. Trump’s sweeping tariffs, and why it is resisting a sale of the ports owned by the Hong Kong company CK Hutchison along the Panama Canal.
It also plays into why Beijing on Tuesday threatened more countermeasures if Mr. Trump went through with imposing an additional 50 percent in tariffs on Chinese goods. China has said it is willing to hold talks, but not under duress.
China’s leaders are also likely calculating that a clash with the Trump administration is inevitable, analysts say. Mr. Trump’s tariffs last week — which also targeted countries like Vietnam and Thailand, where Chinese companies have set up factories to skirt earlier U.S. tariffs — would be seen in Beijing as evidence that Washington is determined to block China’s rise.
“From this vantage, there is little to be gained from capitulating to Trump’s latest demand, because it would not resolve the underlying challenge from the United States,” said Ryan Hass, the director of the John L. Thornton China Center at the Brookings Institution. “At best, they believe, it would merely postpone America’s determination to destroy China’s economy.”
The rising tensions make a meeting between Mr. Xi and Mr. Trump increasingly unlikely.
Mr. Trump, who regards unpredictability as his signature weapon, has said he is open to engaging with Mr. Xi, even suggesting the Chinese leader would visit. But Chinese officials are reluctant to schedule a meeting until the two sides have negotiated details in advance.
Even if Mr. Xi were to cave and submit to Mr. Trump’s demands to cancel China’s retaliatory tariffs, it is unclear what, if any, trade deal would make a meaningful dent in the yawning trade imbalance between the two countries. The United States imported $440 billion worth of Chinese goods last year, more than three times the value of the $144 billion of U.S. goods that China imported.
Beijing sees Mr. Trump as singularly focused on undermining China’s dominance in exports in order to bring manufacturing back to the United States, said Yun Sun, the director of the China program at the Stimson Center in Washington.
“Decoupling might be the endgame,” Ms. Sun said, describing how China is likely interpreting Mr. Trump’s motives.
Mr. Xi has long warned that China’s rise would likely not go unchallenged by the West, and invested heavily in efforts to build up China’s self-reliance.
This week, as stock markets around the world tumbled, Beijing mobilized state-owned banks and investment companies, known informally in China as the “national team,” to shore up their holdings of Chinese shares in an effort to stem the decline. Chinese stocks rose slightly on Tuesday after big declines a day earlier.
And the People’s Daily, the Communist Party’s mouthpiece, published a commentary on Sunday urging Chinese citizens to have confidence in China’s ability to weather the tariffs. The piece argued that China has expanded its trade markets outside the United States and that the Chinese economy is growing more self-sufficient with the help of breakthroughs in technology like artificial intelligence.
Economists say those points are true, but that a full-blown trade war on the scale threatened by Mr. Trump will still inflict considerable pain on China. If the Trump administration imposes an additional 50 percent tariff, it could bring the U.S. levy on Chinese goods to 104 percent. For some products, though, the rate is likely to be much higher because of tariffs that date back to Mr. Trump’s first term.
Chinese exporters might not be able to simply divert their goods to other countries because the flood of Chinese exports has already been met with concern in major markets like the European Union.
At the same time, in this game of tariff brinkmanship, analysts in China think Mr. Trump will be more likely to succumb to domestic pressure to change tack because of the soaring costs of goods and plummeting stock values in the United States.
“If it’s a question of who can endure more pain, China will not lose,” said Wang Wen, dean of the Chongyang Institute for Financial Studies at Renmin University in Beijing.
The United States needed China, Mr. Wen said, more than China needed the United States because Chinese factories make parts and components that cannot be found anywhere else in the world.
“Other countries will buy goods from China and then sell them to the United States,” he said.
Part of China’s strategy has also been to use the chaotic consequences of Mr. Trump’s tariffs to try to draw the rest of the world away from Washington’s orbit.
Mr. Xi is reportedly planning to visit Southeast Asian countries including Vietnam next week. Beijing has also tried to project a united front with Japan and South Korea against Mr. Trump’s tariffs, though officials in Tokyo and Seoul, which both rely on America for security, have distanced themselves from the Chinese position.
On the same day that Mr. Trump unveiled his tariffs, China’s Foreign Ministry posted a video on social media casting the United States as a source of harm and instability, with references to the U.S. president’s push to deport migrants and to tariffs imposed on cars newly delivered at a port. “Do you want to live in a world like this?” a narrator asks.
That was followed by scenes of Chinese peacekeeping troops and Chinese rescue teams pulling victims out of the rubble after Myanmar’s recent earthquake, laid over a soundtrack featuring John Lennon’s “Imagine.”
“There’s no question Beijing is milking this moment,” said Danny Russel, a diplomacy and security analyst at the Asia Society Policy Institute in Washington. The Foreign Ministry’s video is “pure propaganda jujitsu” aimed at “painting Trump’s tariffs as reckless U.S. chaos while China offers order and partnership.”
“But the view from Beijing is conflicted,” Mr. Russel said. “Beijing’s instinct is to avoid interrupting its enemy when he’s making a mistake, but they’re also deeply worried those mistakes could crash the global economy, and China with it.”
