Posted on 10/23/2025 4:03:20 PM PDT by SeekAndFind
Donald Trump and Xi Jinping are due to meet in South Korea next week. However, it is uncertain whether they actually will. Such is the shocking state of the world’s most important relationship. For weeks, America and China have been lashing out at each other. America has tightened tech-export restrictions and threatened higher tariffs; China has wielded sanctions and restrictions on rare earths. The two sides communicate poorly. In the White House there is a belief that America has the upper hand in this test of nerves and pain-tolerance. Scott Bessent, the treasury secretary, says China is “weak”. But the reality is different.
China is winning the trade war. It has learned to escalate and retaliate as effectively as America. And it is experimenting with its own extraterritorial trade rules, thus changing the path of the world economy.
When Mr Trump re-entered the Oval Office, the defence component of his China policy was ambiguous: was he prepared to defend Taiwan and American allies from Chinese military threats or not? The answer is still worryingly hazy. But his stance on trade with China was clear. He would ramp up the pressure campaign that he began in his first term. That meant more tariffs, more controls on high-tech trade and the enthusiastic use of sanctions.
The administration’s aim was to hobble China’s manufacturing juggernaut, extract financial and commercial concessions and slow China’s technological development. Some in Team Trump even dreamed of a “grand bargain” in which China would pledge to reform state capitalism in return for America taking its foot off its throat.
After six months China is breathing more easily than America, for three reasons. First, it has proved able to withstand American coercion and deft at retaliating, achieving what is known in the jargon as “escalatory dominance”. Some of Mr Trump’s critics attribute this to TACO (Trump Always Chickens Out). It also reflects China’s underlying power, preparation and skill.
The “Liberation Day” tariffs imposed by Mr Trump on China in April were reversed after Wall Street slumped. Recently, after China imposed limits on exports of the rare earths used in high-tech manufacturing, Mr Trump threatened 100% tariffs, only to back down again. His threats to cripple China through a near-total embargo are not credible because doing so would damage America, too. Those who assert that China is in crisis should note that this year its stockmarket has risen by 34% in dollar terms, double the rise for the S&P 500 index.
China has learned to retaliate skilfully. After Mr Trump imposed a levy on Chinese container ships arriving at American ports, it responded with its own port charges. China has threatened antitrust investigations to put pressure on American firms such as DuPont, Google, Nvidia and Qualcomm. Its refusal to buy American soyabeans—a $12bn market for midwestern farmers last year and America’s largest export to China—is beggaring a bloc of voters Mr Trump values.
Although some American chokeholds on China remain, for example with aircraft engines, Mr Xi has pushed hard to rid Chinese supply chains of foreign inputs while making the country indispensable to the supply chains of others. On paper Mr Trump could up the ante by cutting China’s access to the dollar banking system. But he probably won’t; the resulting turmoil in financial markets would hurt America badly.
Amid all the tit-for-tat, China is developing, by trial and error, a new set of global trading norms. This is its second area of success. It wants to build a Chinese-led system on the ruins of the old liberal trading order, one which will rival Mr Trump’s empire of tariffs. Already China has shifted the geography of its trade: in the year to September its goods exports grew by over 8%, even as those to America fell by 27%. China’s threats to limit rare-earth exports inspire fear because it dominates the market and could cripple Western manufacturing supply chains.
But they are also remarkable because they show China trying to impose a system of global licensing. That is a fiercer version of the playbook America has used to control the semiconductor industry. Expect more examples of China recasting the rules of trade as it exploits its position as a sophisticated manufacturer and the largest trading partner of 70-odd countries.
The final reason why China is winning is that the trade war has made Mr Xi and the Communist Party stronger, not weaker. Outsiders point to China’s huge problems, including its property hellscape, timid consumers, cowed entrepreneurs and the overcapacity and capital misallocation that its industrial policy creates.
Yet to many Chinese Mr Trump’s bullying has vindicated Mr Xi’s 12-year project to prepare China for a hostile world by becoming a techno-industrial superpower. This week the Communist Party’s leadership met to discuss a new five-year plan. It is expected to double down on Mr Xi’s techno-nationalist approach.
Much could still go wrong for China. Redirecting exports away from America may prompt more countries to put up tariffs. Its nascent licensing regime could create a bureaucratic nightmare for itself and others. Just as America is discovering, using economic power as a cudgel is risky. The incentive quickly grows for other countries to diversify and innovate to reduce their dependence on you.
Yet make no mistake: the prospect unfolding is not of two countries overcoming their differences, but of belligerent giants weaponising their economic power. And even as China is winning Mr Trump’s trade war, the retreat from open commerce ultimately makes everyone a loser.
Baloney.
RE: Baloney
Please elaborate.
As slang, “baloney” means nonsense, rubbish, or something foolish or not to be taken seriously. It’s often used to dismiss or mock a statement or idea as absurd or untrue, e.g., “That’s a bunch of baloney!” The term likely derives from the sausage name, possibly linked to “bologna” and used figuratively to suggest something is “full of it.”
Economist magazine is usually very pro-Trump . Im surprised they published this
Can you post the author of this piece? Or is it the CCP et al?
The Economist is very pro-China.
BWAAAHAHAHAHAHA, way to 1 up the little poster troll.
Nicely done.
China is winning the Trade War simply because they invested and we spent our money on worthless wars. They had a long term plan and we had none at all.
“The Economist “
More BS from another leftist Trump hating rag with conservative sounding name.
I know, I was just joking. I wonder if they get money from Red China or they want to turn America into a chinese style slave state
“The Economist “
More BS from another leftist Trump hating rag with conservative sounding name.
The strongest evidence that China is losing lies in the escalating unemployment crisis.
In contrast, the U.S. is generating tariff revenue, reshoring supply chains, and pressuring allies to align against Chinese overcapacity, turning the conflict into a global containment effort.
China’s economy relies on its 100 million manufacturing jobs (about 28% of total employment) for social stability and growth, particularly in coastal hubs like Guangdong and Zhejiang, where 70-80% of exports originate. U.S. tariffs—now averaging 107% on Chinese goods after escalations in 2025—have slashed demand for Chinese exports, triggering factory closures and mass layoffs.
A May 2025 Natixis report estimates that sustained 30%+ tariffs could halve China’s U.S.-bound exports, leading to 6 million manufacturing job losses by end-2025 (rising to 9 million if tariffs hit 125%). Youth unemployment, already at 17.1% in Q3 2025, has surged as graduates flood into a contracting sector. Factory activity plunged to a 19-month low in April 2025 (PMI at 49.0), with ongoing contraction through September despite government interventions.
Unlike the U.S., where manufacturing is ~8% of GDP and diversified, China’s “gig economy” shift (e.g., to low-pay delivery jobs via apps like Meituan) offers no real buffer—workers earn 30-50% less with zero protections. Factory owners face legal severance costs (one month’s pay per year of service), prompting ghost closures where bosses vanish, leaving workers unpaid. This fuels social unrest: Labor protests rose 25% in H1 2025, per China Labor Bulletin, echoing 2018-2019 unrest but amplified by a housing crisis that has wiped out household wealth (real estate is 25% of GDP).
In contrast, U.S. unemployment remains at 4.1%, and tariffs have spurred 200,000+ manufacturing jobs via reshoring (e.g., CHIPS Act investments).
In sum, while China absorbs short-term hits via diversification, the trade war is hollowing out its manufacturing base, fueling unemployment and deflation that threaten Xi’s stability mandate.
This isn’t “winning” for China—it’s survival mode, proving tariffs are biting where it hurts most
If China is winning, it is because there are too many corrupt people in the West.
“The Economist “
More BS from another leftist Trump hating rag with a conservative sounding name.
You must have a different “Economist” in your universe.
Here, it’s pure TDS.
LMAO
China is losing badly and will cave completely soon.
“Its refusal to buy American soyabeans”
China has over 50 percent of the world’s hogs. The refusal to buy American soybeans will last until Brazil runs out. And then Trump should pay off American soybean farmers and refuse to sell. Twelve billion dollars has now become a rounding off entry.
“Economist magazine is usually very pro-Trump . “
ROTFLMAO!
You live in an imaginary world.
Seekandfind articles by leftwing morons that say Trump is an idiot. Just lovely
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