The US-China tariff trade war heats up: Why is China confident it can defeat Trump? Because America can't afford to lose

Here's the English translation: The US-China trade war is heating up again, with US President Trump threatening to impose over 100% tariffs on Chinese goods, while China vows to "fight to the end". Facing high-pressure tactics, why is China still confident that it can gain the upper hand in this tariff confrontation? From economic leverage to strategic countermeasures, Beijing seems to have prepared a counterattack playbook. According to The Economist, China believes it holds multiple negotiation chips. First, Trump has several non-economic geopolitical demands from China, including assistance in containing fentanyl and promoting Russia-Ukraine ceasefire. Second, Trump's reluctance to shut down TikTok, a popular Chinese app in the US, and Tesla's vulnerability with one-fifth of its business in China have become potential counterattack tools for Beijing. As Natixis economist Alicia Garcia Herrero stated: "If Tesla were forced to exit the Chinese market, it would create enormous pressure on the US." Meanwhile, China is betting on insufficient economic resilience in the US, believing Trump's new tariffs will trigger domestic inflation and public discontent, forcing him back to the negotiating table. China is even considering yuan appreciation to increase US inflationary pressure, despite the risks to its own supply chain. To respond to the trade war, China's leadership may restart policies similar to those during the 2008 financial crisis, introducing a stimulus plan worth over a trillion yuan. Premier Li Qiang has already previewed preparations for "unexpected external shocks". Beyond economic measures, China is also considering diplomatic and public opinion offensives, including potentially suspending cooperation on fentanyl issues and restricting imports of US agricultural, livestock, and service products - many from Republican-dominated states. In the financial arena, China is pressuring the Fed by selling US debt, creating a dual confrontation with Trump's tariff strategy. Kimbal Musk believes Trump's move aims to force the Fed to cut rates and address the $6.5 trillion national debt refinancing challenge due in June.

Assuming that China goes against the grain, it is attempting to force the Federal Reserve to maintain high interest rates by massively selling US Treasury bonds, increasing internal pressure on the United States: "As a non-democratic system, China can control public opinion, but Trump is constrained by multiple pressures from US media, businesses, and voters, giving China an advantage in information control."

This game only needs to continue until the end of May, and China will be able to make Trump lose in the tug-of-war with the Federal Reserve and compromise due to US public opinion pressure.

(US Treasury Yield Soaring, Rumors of China Massively Selling US Debt, Will the Federal Reserve Emergency Rescue?)

Decoupling Risks and Global Impact: This Confrontation May Have No Winner

As the situation heats up, the risk of comprehensive economic decoupling between China and the US resurfaces. Even though China has long opposed "decoupling" and views it as a Western sanction method, domestic support for decoupling is now increasing:

If fully decoupled, China's supply chain and export structure will be severely damaged, and it will be difficult to completely shift to internal circulation or non-US markets in the short term. The global market will also face high uncertainty, and the trade system may be reshuffled.

Now, the China-US trade war has evolved into an all-round game, covering economics, finance, diplomacy, and public opinion. China's "fight to the end" and Trump's "tariff pressure" leave little room for compromise in the short term. Regardless of who ultimately emerges victorious, both businesses and the public can only brace themselves.

(Tariff Tsunami Financial Survival Guide, from Investment Diversification to Strategy Sharing)