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US-China tensions grow – World – Al-Ahram Weekly.
The bilateral tensions between Beijing and Washington since the return to power of US President Donald Trump in January this year have followed the trajectory of the tariffs he has imposed on a growing list of Chinese imports, starting at 10 per cent in February and reaching 145 per cent this month.
Beijing retaliated immediately, hitting US goods with tariffs that increased from 15 per cent in January to 125 per cent as of 11 April. It also added more US-affiliated firms to its “unreliable entities” list and tightened its restrictions on exports of strategic goods, such as rare earth minerals, to such companies.
Washington maintains that its tariffs are a response to China’s unfair trade practices. It also blames China for its enormous trade deficit, amounting to $295.5 billion in 2024, according to the US Census Bureau, and it believes that tariffs are the way to balance the books. China counters that the US’ own policies are responsible for its deindustrialisation, loss of millions of manufacturing jobs, and other economic difficulties.
The US has fallen back on tariffs as a protectionist measure to support its domestic industry, boost the competitiveness of US products, and revive US economic sovereignty. But there is also a strategic dimension: the US is determined to curb China’s rise in crucial advanced technologies, such as 5G networks, artificial intelligence, quantum computing, and electric vehicles – all areas that have become battlefields in the geopolitical rivalry between the two superpowers.
It would be misleading to view the current trade war independently from the larger tectonic shifts in the world order. Not only is China challenging the US’ global economic status, but it is also becoming more active on the international stage as a diplomatic mediator and an increasingly sought-after one.
More and more countries from the Global South are turning to Beijing to deepen its engagement in conflict resolution and peace-making. In the Middle East, China is seen as less ideologically driven, more impartial, and more genuinely committed to peace than the US. Many believe it could fulfil the role of “honest broker” that the US has never played.
The US trade war with China is also the flip side of heightened tensions over other contentious issues, foremost among which is the US’ continued support for Taiwanese independence, even though Taiwan is internationally recognised as an integral part of China.
Officially, Washington continues to abide by its “One China” policy. However, many of its provocative statements and military manoeuvres suggest otherwise. So does the situation developing around the Philippines, where Washington, echoed by its NATO plus allies, has proclaimed its support for Manilla in the event of skirmishes between Philippine and Chinese ships in disputed waters in the South China Sea.
US-Chinese tensions extend to the Middle East, where China has developing relations with regional powers, including US adversaries. Beijing supports Iran in its current conflict with the US over its nuclear programme, and it has openly backed Iran’s right to possess nuclear weapons. Beijing is also an increasingly vocal opponent of US-Israeli plans to target Iran militarily, just as it has come out against the US-backed Israeli genocide in Gaza.
Washington’s escalating trade war against China has been accompanied by an increasingly hostile rhetoric. In response to China’s 84 per cent retaliatory tariff, US Treasury Secretary Scott Bessent told the US channel Fox Business that China’s decision was a “losing proposition.”
“I think it’s unfortunate that the Chinese actually don’t want to come and negotiate, because they are the worst offenders in the international trading system,” Bessent said.
China rejects such assertions. “What is needed now is not more unilateral tariffs, but dialogue and consultation based on equality and mutual respect,” Chinese Foreign Ministry Spokesperson Guo Jiakun said in a press conference in mid-February.
“We urge the US to correct its wrongdoing and stop politicising and weaponising trade and economic issues,” he added.
More recently, China’s Commerce Ministry Spokesperson He Yadong said that “China’s position is consistent, and we are open to consultations and dialogue. But any form of consultation or negotiation must be conducted on the basis of mutual respect and in an equal manner.”
Beijing’s counter-tariffs are intended to back up its words with actions. While stressing that it hopes to avoid further escalation, its measures remind Washington that it can hit back at sensitive sectors in the US economy, such as soybeans, automobile parts, and liquified natural gas.
Domestically, China has used regulatory tools against US multinationals operating in China, such as antitrust investigations and licence reviews. It has also added six US firms to its list of unreliable entities and placed 12 more US companies under export restrictions.
China has other potential tools it could deploy incrementally in response to the Trump administration’s measures. For example, it could sell off chunks of its approximately $734 billion holdings of US Treasury bonds, which would drive up their interest rates, rocking global financial markets. Or it could devalue its currency, offsetting tariffs by increasing the competitivity of its exports.
China could also broaden its controls over exports of vital minerals. While it already has imposed export restrictions on gallium and germanium, it could expand restrictions to include other rare earth elements. All these are critical for semiconductors, communications, and electronic vehicles.
China is demonstrating its ability not only to resist Washington’s economic arm-twisting but also to restrain the US’ economic hegemony. This has been reflected in the recent slump in the dollar and in a softening of Trump’s rhetoric towards China.
Faced with China’s pushback, Trump has pursued another tack, which was to claim that bilateral talks were progressing with regard to China opening up to US trade. On 24 April, the Chinese Foreign Ministry called the US out for misleading public opinion, however, stating that the US’ claims of progress in non-existent talks had as much substance as “trying to catch the wind.”
Ashram