China’s trade confidence grows as U.S. pressure mounts; Beijing turns tariffs into leverage
Despite escalating tariff threats from Washington, China is diversifying its markets, strengthening global trade ties, and proving that economic resilience can be its strongest countermeasure. However, despite a recent truce in the US-China tariffs spat, many trade issues remain unresolved.
- “China still relies on the U.S. for aerospace technology and high-performance semiconductors,” Scott Kennedy said. “And Chinese-made products remain deeply embedded in American supply chains,” he added.
- Dubbed ‘Chimerica’ — the relationship between the United States and China remains “bruised but not broken. It’s not dead,” said, “and it won’t disappear easily.”
Beijing is standing firm in its trade dispute with Washington — and finding new partners along the way. The higher the tariffs, the stronger China’s confidence seems to grow.
A viral image circulating in the United States — a small American flag packaged in a plastic bag labeled “Made in China” — captures a growing anxiety among Americans about their economic dependence on Chinese manufacturing. For some supporters of former U.S. President Donald Trump, it’s a symbol of decline, prompting calls to boycott Chinese goods.
But cutting ties may be easier said than done. The world’s two largest economies remain deeply intertwined — from smartphones and microchips to soybeans and rare-earth minerals — making complete economic decoupling both costly and unrealistic.
Analysts agree that while both sides would feel pain from a trade rupture, the U.S. economy would likely suffer more.
“Despite security concerns, both sides still gain significantly from trade,” said Scott Kennedy of the Center for Strategic and International Studies (CSIS), dw,com reports,
The U.S. trade deficit with China has ballooned from $295 billion in 2013 to $382 billion in 2024, with China exporting $526 billion worth of goods to the U.S. last year — more than triple the value flowing in the opposite direction.
Electronics dominate these imports. American consumers rely heavily on Chinese-made smartphones and computers worth $127 billion — products that would immediately become more expensive if tariffs rise further.
Beijing has responded to Washington’s tariff hikes with defiance rather than retreat. Chinese officials have vowed to “fight to the end,” warning that “threatening high tariffs is not the right way to deal with China.”
China has imposed counter-tariffs and export restrictions, especially on rare-earth elements essential to electric vehicles, semiconductors, and defense industries. The U.S. imports over 90% of its rare-earth supply — and more than 80% of that comes from China, which dominates global production and refining capacity.
China has also stopped buying American soybeans, once worth nearly $13 billion annually, shifting instead to suppliers in Brazil and Argentina — a clear signal that Beijing is willing to weaponize agricultural imports to push back against U.S. policy.
Far from retreating, Beijing is reshaping its global trade map. According to Bloomberg, Chinese exports to Africa rose 56% between September 2024 and September 2025, while shipments to Southeast Asia, Europe, and Latin America increased by 16%, 14%, and 15% respectively.
“The U.S. now ranks behind ASEAN and roughly on par with the EU in China’s trade volume,” said Christina Otte from Germany Trade & Invest (GTAI). She noted that bilateral trade between Washington and Beijing fell by over 10% in the first half of 2025, while Chinese firms expanded manufacturing bases in Vietnam and Malaysia to supply U.S. markets indirectly.
Meanwhile, China is reducing its financial exposure to Washington. Its holdings of U.S. Treasury securities have fallen from $1.3 trillion in 2013 to $765 billion in 2025, placing it behind Japan and the UK among foreign creditors.
Despite these shifts, experts warn that “decoupling” is more rhetoric than reality.
“China still relies on the U.S. for aerospace technology and high-performance semiconductors,” Kennedy said. “And Chinese-made products remain deeply embedded in American supply chains.”
As presidents Xi Jinping and Donald Trump prepare to meet at the upcoming APEC Summit in Gyeongju, South Korea, both sides are expected to seek a pause in the tariff spiral.
Kennedy believes the relationship — dubbed ‘Chimerica’ — remains “bruised but not broken. It’s not dead,” he said, “and it won’t disappear easily.”
