"Many Underestimate Beijing": China is Ready for a Trade War with the US and Has Already Selected a Number of Effective Measures

China has developed powerful measures to deal with a new round of trade tensions with the United States if newly elected President Donald Trump tries to renew economic war between the world's largest economies, writes The Financial Times.

Since Trump’s surprise election victory in 2016, China has faced a wave of economic restrictions: higher tariffs, tighter controls on foreign investment, and sanctions on Chinese companies. These measures have posed a significant challenge for Beijing, especially given the country’s worsening economic situation. But over the past eight years, China has adapted, passing laws that allow it to restrict foreign companies’ access to the Chinese market, impose its own sanctions, and manipulate critical supply chains, especially with the United States.



While Joe Biden has maintained many of the restrictions imposed by the Trump administration, Trump himself has outlined an even tougher course and has already begun assembling a team whose members will support increased pressure on China.

Beijing now has new legal tools at its disposal, such as the “foreign sanctions law,” which allows it to respond to restrictions from other countries, and the “unreliable entity list,” a list of foreign companies that could be seen as threatening China’s national interests. The expanded export control rules allow China to leverage its dominant position in the supply of rare earth metals and lithium, resources critical to advanced technologies. of technologies, – which can become a powerful lever of pressure.

Experts point out that many underestimate the potential impact of China’s measures. Andrew Gilholm, head of China at Control Risks, points out a number of illustrative sanctions: for example, Beijing has banned its companies from supplying key components to the American drone manufacturer Skydio, which in turn supplies the Ukrainian armed forces. Another example is the threat to blacklist PVH, the owner of Calvin Klein and Tommy Hilfiger, which could deprive it of access to the huge Chinese market.

China is also taking steps to strengthen its own technology and resource supply chains to reduce its reliance on American companies, and is expanding cooperation with countries that are more neutral in their dealings with Washington. Still, the threat of comprehensive tariffs on Chinese imports that could reach 60% remains a real risk for Beijing, especially as the economy slows, consumer and business confidence declines, and youth unemployment rises.

If the US is perceived as an unreliable trading partner, it could push other leading economies to strengthen ties with China in search of stable and profitable export markets, creating a new balance of power in global trade.