Xi Jinping has spent years preparing for a moment like this. In April 2020, before the trade war launched by President Trump that would shake the global economy, China’s top leader held a meeting with senior Communist Party officials and laid out his vision for turning the tables on the United States in a confrontation.
Tensions between China and the first Trump administration had been simmering over an earlier round of tariffs and technology restrictions. Things got worse after the emergence of Covid, which exposed how much the United States and the rest of the world needed China for everything from surgical masks to pain medicines.
China could have opened its economy to more foreign companies or bought more American products, as it had promised during trade talks. It could have stopped subsidizing factories and state-owned companies that made cheap steel and solar panels so cheaply that many American manufacturers went out of business. Instead, Mr. Xi chose an aggressive course of action.
Chinese leaders must “tighten international production chains’ dependence on our country, forming a powerful capacity to counter and deter foreign parties from artificially disrupting supplies” to China, Mr. Xi said in his speech to the Central Financial and Economic Affairs Commission in 2020.
Put simply: China should dominate supplies of things the world needs, as a way to dissuade its adversaries from using tariffs or trying to cut China off. Since then, Mr. Xi has ramped up exports and deepened China’s position as the world’s leading base for manufacturing. He has also introduced new weapons of economic warfare to the country’s arsenal: export controls, antimonopoly laws and blacklists for hitting back at American companies.
When the current Trump administration slapped huge tariffs on Chinese goods, the Chinese government was able go on the offense. Besides retaliating with its own taxes, the Chinese imposed export restrictions on a wide range of critical minerals and magnets.
Making the World Choose Sides
Even though they are starting talks that American officials say are aimed at de-escalating tensions, the two nations seem set on a no-holds-barred competition, particularly over crucial technologies that will shape the future like artificial intelligence. The rivalry may start cleaving the world into competing spheres of influence, with the pressure to choose sides mounting.
China has expanded its dominance in lithium-ion batteries used to power electric vehicles, cutting-edge robots for manufacturing, solar panels and wind turbines. Experts say China also is catching up with the United States in artificial intelligence, considered the battlefront of the next industrial revolution.
Mr. Xi also tightened his grip over China’s vast propaganda apparatus, which has ramped up in recent weeks to rally the public for a protracted “struggle”.
Even if Mr. Xi ends up having to back down first, he could spin a tactical retreat as a win over Mr. Trump. But it is unclear that Mr. Xi’s long-term strategy will make China strong enough to overtake the United States as the top superpower.
Experts have long argued that spending on social welfare would make China’s economy more balanced and less vulnerable to the West. Chinese economists have urged the government to invest in hospitals and pensions and to help the hundreds of millions of city-dwelling rural migrants qualify for urban benefits.
Some experts are questioning whether Mr. Xi should be challenging the United States so aggressively, rather than hiding its strength and biding its time.
Daisuke Wakabayashi contributed reporting from Seoul and Berry Wang and Joy Dong from Hong Kong.
Source: https://www.nytimes.com/2025/05/10/world/asia/xi-jinping-china-trade-war.html
