In a significant escalation of trade tensions, U.S. President Donald Trump has doubled tariffs on all imports from China to 20%, prompting a fierce response from Beijing. In reaction to this pressure, China announced a series of retaliatory measures, including imposing tariffs of up to 15% on selected American goods and expanding export controls on a number of U.S. firms while also filing a lawsuit at the World Trade Organization (WTO). Chinese officials have made it explicitly clear that they will not buckle under what they characterize as American hegemony. Lin Jian, a spokesperson for China’s Foreign Ministry, stated during a news briefing that any attempt to threaten or coerce China amounts to a ‘miscalculation’. “If the U.S. insists on waging a tariff war, trade war, or any other kind of conflict, China will fight till the end,” Lin emphasized.
The backdrop to this escalating rivalry comes amidst China’s annual ‘two sessions’ political gathering, marking a display of national unity and resilience against external pressures. Chinese President Xi Jinping appears poised to use this event to underscore China’s ambitions as a technological leader, particularly as U.S. tariffs loom large over China’s economic strategy. Critical to this narrative is the notion of self-reliance and innovation within China’s growing tech sector. In reports leading up to this gathering, Xi stressed the importance of meeting challenges head-on and maintaining confidence in China’s path.
As China prepares to unveil its growth and military spending targets at the National’s People Congress (NPC) meeting, analysts expect a reaffirmation of current strategies rather than any major shifts in policy. They anticipate that the emphasis will remain on bolstering high-tech industries and seeking self-sufficiency in key sectors amid urged urgency from the growing pressure posed by U.S. restrictions. Despite the continued setbacks in the economy, which have been affected by the property sector crisis and diminished consumer spending, Chinese officials are likely to reiterate their commitment to innovation and technological advancement. This includes a particular focus on sectors like artificial intelligence and green technologies, which have seen significant investments recently.
The Chinese government’s analysis indicates that traditional growth models may no longer be sustainable, forcing a shift towards innovation-driven economic structures. As the NPC unfolds, observers will look for key policy announcements to address domestic issues as well as strategies to mitigate the impacts of U.S. tariffs. There is an understanding within the Chinese leadership that bolstering support for industrial production may lead to increased friction with the U.S. and other trade partners—but they remain confident in their capacity to navigate these challenges successfully. The ramifications of Trump’s tariff policies are certainly significant, setting the stage for an evolving and contentious trade relationship between the two economic giants.