Opinion | US vs China: who can endure a trade war longer?

While Trump assumes that China’s trade surplus with the US makes it inherently vulnerable, Beijing appears unfazed

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Parts for toys depicting US President Donald Trump are seen at a factory specialising in solar-powered plastic gadgets in Yiwu, in China’s Zhejiang province on April 11. Photo: AFP

Published: 8:30pm, 30 Apr 2025Updated: 8:43pm, 30 Apr 2025

As the US-China trade war escalated – with US President Donald Trump reportedly pressuring other countries to curb trade with China in exchange for tariff exemptions – Beijing issued a forceful warning: those who bow to US pressure will face consequences.

While maintaining a hard-nosed position, China has not escaped unscathed. In the first quarter of 2025, the consumer price index – a measure of downstream demand – fell by 0.1 per cent year on year, while the producer price index – tracking midstream and upstream production – declined 2.3 per cent. Both indicators fell short of annual targets.

Trump’s strategy rests on the assumption that China’s trade surplus with the United States makes it inherently vulnerable – and that tariffs could compel Beijing to show deference and renegotiate terms on his terms.

China’s trade surplus is rooted in its vast industrial production. Since 2001, its share of global value-added manufacturing has soared from 6 per cent to nearly 30 per cent, while the US’ share has declined from 28 per cent to 17 per cent. Without access to the US market, China faces a genuine vulnerability – one that would intensify if key trading partners align with Washington.

So why does Beijing remain unfazed? What fuels its confidence that it can endure decoupling and a prolonged trade war?

China cannot easily replace lost export markets, just as tariffs alone cannot revive American manufacturing overnight. As the trade war grinds on and bilateral trade nears zero, the real question is no longer who can escalate further – but who can endure longer.