Five cards China holds in a trade war with the United States

A trade war between the two largest economies in the world is already in full swing.

Chinese exports to the United States are confronted with up to 245% tariffs, and Beijing has withdrawn with a 125% fee for US imports. Consumers, businesses and markets are supported for more uncertainty, as fears of global recession have intensified.

The government of Chinese President Xi Jinping has repeatedly said that he is open to dialogue, but warned that, if necessary, it would “fight until the end”.

Here is a look at what Beijing has in his arsenal to oppose US President Donald Trump’s tariffs.

China is the second largest economy in the world, which means it can absorb the impact of tariffs better than other smaller countries.

With more than a billion people, it also has a huge domestic market that can take part of the pressure of exporters who are trying from tariffs.

Beijing is still stuck with the keys because The Chinese do not spend enoughS But with a number of stimuli – from subsidies for household appliances to “Silver trains” For travelers, this may change.

And Trump’s tariffs gave an even more powerful impetus to the Chinese Communist Party to unlock the country’s consumer potential.

Management can “be very well ready to withstand the pain to avoid the capitulation of what they believe is US aggression,” USA, US Chinese Trade at the Peterson Institute in Washington, told BBC Newshour.

China also has a higher pain threshold as an authoritarian regime as it is much less worried than short-term public opinion. There is no election around the corner to judge his leaders.

However, excitement is a problem, especially because there is already dissatisfaction with the current property crisis and job loss.

Economic uncertainty about tariffs is another blow to young people who only ever knew the growing China.

The party appealed to nationalist sentiment to justify its retaliatory tariffs, with state media calling on people to “meteorological storms together”.

President Jinping may worry, but so far Beijing has hit a challenging and confident tone. An employee assured the country: “Heaven will not fall.”

China has always been known as the World Factory – but it pours billions to make it far more advanced.

Under, she was in a competition with the United States for technological domination.

He has invested strongly in home technology, from renewable energy sources to chips to AI.

Examples include the Deepseek chatbot that was Celebrated as a great Chatgpt rivaland byd, who beat Tesla last year to become the largest electric vehicle manufacturer in the world (EV). Apple is losing its valuable market share of local competitors such as Huawei and Vivo.

Beijing has recently announced plans to spend more than 1TN over the next decade to support AI innovation.

US companies have tried to move their supply chains away from China, but they struggled to find the same scale of infrastructure and qualified labor elsewhere.

Chinese manufacturers at every stage of the supply chain have given the country decades, which will take time to repeat.

This unsurpassed expertise of the supply chain and state support made China a great enemy in this trade war – somehow Beijing is preparing for this from Trump’s previous term.

Since Trump’s tariffs hit the Chinese solar panels in 2018, Beijing has accelerated his plans for a future beyond the world order, led by the United States.

He has pumped billions in a A controversial trading and infrastructure programBetter known as the Belt and Road initiative to strengthen ties with the so-called global south.

The expansion of trade in Southeast Asia, Latin America and Africa comes when China is trying to stop from the United States.

Once, US farmers supplied 40% of soybean imports to China – this figure is now moving at 20%. After the last trade war, Beijing grew up the cultivation of soybeans at home and purchased record volumes from the harvest from Brazil, which is now its most soybean supplier.

“The tactics are killing two birds with one stone. It deprives the farmer’s belt of America from once a sick market and burns the power of attorney of China’s food security,” says Marina Yue Gian, an associate professor at the Australian China Relations Institute in Sydney in Sydney.

The US is no longer the largest export of China: this place now belongs to Southeast Asia. In fact, China was the largest trading partner for 60 countries in 2023 – almost twice as much as the United States. The largest exporter in the world, he made a record surplus of 1TN at the end of 2024.

This does not mean that the US, the biggest economy in the world, is not a decisive trading partner for China. But that means it will not be easy for Washington to support China in an angle.

Following reports that the White House will use bilateral trade negotiations to isolate China, Beijing has warned countries against “Achieving a deal at the expense of China’s interests.”

That would be impossible choice For much of the world

“We cannot choose and we will never choose (between China and the US),” Malaysian Trade Minister Tenku Zafruul Aziz told the BBC last week.

Trump behaved firmly as the shares fell after his announcement of extensive tariffs in early April, resembling the stunning deposits of the drug.

But he made a turn, stopping most of these tariffs for 90 days after the sharp sale of US government bonds. Also known as treasures, they have long been seen as a safe investment. But the trade war shook confidence in the assets.

Since then, Trump has hinted at de -escalation in commercial tensions with China, saying that the tariffs for Chinese goods will “reduce significantly, but it will not be zero.”

So, experts say, Beijing now knows that the bond market can rattle Trump.

China also owns $ 700 billion in US government bonds. Japan, an unwavering American ally, is the only owner of the United States to own more than that.

Some say this gives a lever to Beijing: Chinese media regularly sail the idea of ​​selling or retaining purchases of US bonds as a “weapon”.

But experts warn that China will not come out of such a situation.

More recently, this will lead to huge losses for Beijing investment in the bond market and destabilizes the Chinese yuan.

China will only be able to put pressure on the US government bonds “only to a point,” says Dr. Gian. “China holds a chip for negotiation, not financial weapons.”

However, what China can, however, is its almost monopoly in the extraction and refinement of rare lands, a number of elements that are important for modern production production.

China has huge deposits from them, such as dyspsy, which is used in magnets in electric vehicles and wind turbines, and a irrium that provides a heat -resistant coating for jet engines.

Beijing has already responded to Trump’s latest tariffs, limiting the exports of seven rare lands, including some that are essential to creating AI chips.

China represents about 61% of the production of rare land and 92% of their refining, according to the forecasts of the International Energy Agency (IEA).

While Australia, Japan and Vietnam have begun yield for rare land, it will be years before China is cut from the supply chain.

In 2024, China banned the export of another critical mineral, an antimony that is crucial to various production processes. Its price is more than doubled against the background of a wave of panic and searching for alternative suppliers.

The fear is that the same can happen with the market of rare earthnis, which would break seriously different industries from electric vehicles to defense.

“Anything you can turn on or exclude is probably moving in rare lands,” Thomas Kruemmer, director of international trade and ginger investment, investment, Before the BBC before.

“The impact on the US defense industry will be essential.”