World Media on China: How Beijing Responds to Trump 2.0

On the morning of May 6, Xi Jinping, Macron, and European Commission President Ursula von der Leyen held a trilateral meeting. While Macron was speaking, Xi Jinping was still looking down at his script. (Video screenshot)

[People News] During Trump’s first tenure as U.S. President in 2017, he launched a trade war against China, citing "unfair trade" practices, which significantly impacted global trade and supply chain structures. Now, with Trump set to be sworn in again in two months and indicating a potential escalation of the trade war as part of his "Make America Great Again" agenda, the global media has turned its attention to how China, as the world's second-largest economy and a major U.S. trading partner, will respond. The Sino-U.S. rivalry is widely anticipated to continue reshaping global trade dynamics.

Trump's Re-election Brings Anxiety to China

According to a report by Voice of America, Trump officially initiated the trade war against China in 2019 during his first term as president. This trade conflict not only altered the global trade and supply chain landscape, making the "decoupling" from China a popular and pressing issue but also contributed to China’s current economic woes.

From the outset of Trump's campaign for re-election, trade issues with China were a key focus for him and a central point of interest for observers.

The outcomes of Trump’s initial trade war with China remain a topic of debate, with arguments on both sides regarding whether it was more beneficial or detrimental to the U.S. However, there is no longer any dispute that the trade war harmed China, with its losses benefiting emerging countries in Southeast Asia and India. With Trump poised to return to the White House, the question of how China will fare has become a focal point for analysts.

A November 7th report by Reuters encapsulated this attention, stating:

"China (the Chinese government) respects the outcome of the U.S. election and congratulates Donald Trump on his victory. With the looming threat of U.S. tariffs, an official Chinese newspaper called for a 'pragmatic' approach to addressing bilateral differences."

"Republican Trump, who pledged harsh tariffs against China, won the election on Tuesday with a decisive victory over Democrat Kamala Harris and will take office in January next year."

"A spokesperson for China’s Ministry of Foreign Affairs said in a statement late Wednesday: 'We respect the choice of the American people and congratulate Mr. Trump on being elected President.' U.S.-China relations have been tense for years, particularly regarding trade and security, including issues involving Taiwan and the South China Sea."

"Trump's victory could bring back the issues from his first term in 2017-2021 when he waged a trade war against the world’s second-largest economy, imposing punitive tariffs…"

State Media Pretends U.S. Election Is Unimportant, But…

Les Échos, a major French business newspaper, published an article on November 6th, the day after the U.S. election, titled "U.S. Presidential Election: With Trump's Return, China (the Chinese government) Prepares for New Turmoil." The article highlighted an intriguing fact: while Chinese state media attempted to show that the U.S. election was irrelevant to China, the reality was quite different. The report stated:

"With Donald Trump's victory, U.S.-China relations will undoubtedly enter a more turbulent new phase. Since both Republicans and Democrats view China (the Chinese government) as a strategic competitor to the U.S., Beijing claims not to have a 'preference' in the U.S. election. However, a Harris victory would at least bring some continuity, while a Trump victory suggests a more uncertain chapter."

"The CSI 300 Index (comprising the top 300 stocks listed on the Shanghai and Shenzhen Stock Exchanges) reflected this nervousness, closing down 0.50% after significant fluctuations throughout the day. The Hang Seng Index in Hong Kong dropped by 2.3%. On Wednesday evening, the main state-run news program Xinwen Lianbo opened with Xi Jinping’s visit to Hubei Province, as if the U.S. election were inconsequential. The CCP leader (Xi Jinping) did not congratulate Trump until Thursday, when he emphasized the need to find 'common ground.'"

"Most critically, Beijing fears a new trade war with Trump. This would come at the worst possible time for Beijing, as the Chinese economy slows down. During his campaign, Trump, the Republican candidate, threatened to impose at least 60% tariffs on all Chinese-made products."

"Zhu Tian, an economics professor at the China Europe International Business School in Shanghai, calculated that 'in the worst-case scenario, this could cost China 1% to 1.5% in economic growth in the first year, with diminishing effects thereafter.' However, with official targets for 2024 growth already strained by a severe real estate crisis, China (the Chinese government) cannot afford to lose any growth points…"

Can China Use Europe to Counterbalance the U.S.?

Forbes published an interview report on November 7th featuring Cole Gibbs, a former investment banker and ex-president of the American Chamber of Commerce in Shanghai, sharing his personal views on U.S.-China trade prospects. Gibbs, now teaching at the University of San Francisco and continuing to travel between the U.S. and China as an investor and consultant, is also the editor and co-author of Selling to China: Successes, Failures, and the Evolving Story and is working on a second book, Under the Dragon's Belly: China's Conflicts, Contradictions, and Weaknesses.

The Forbes report noted: "In a phone interview, Gibbs stated that he expects tariffs on Chinese imports to rise after Trump’s election. As U.S. companies try to avoid the effects of tariffs while continuing to expand their businesses in the world’s second-largest economy, tariffs will accelerate 'decoupling.'"

"In this context, Gibbs' current advice to American companies with sales and long-term investments in China is straightforward. 'Be prepared. Trump will accelerate decoupling. Multinational companies should further isolate their Chinese operations, completely separating them from their global business. This trend has been ongoing for some time and is likely to continue regardless of which administration is in power,' Gibbs said."

For China and many other nations with close trade ties to this global economic giant, how China responds to Trump 2.0 has become a central concern. During the last trade war Trump initiated against China, the Chinese authorities attempted to counteract the U.S. while courting the EU (by reducing tariffs on EU countries), aiming to ally with Europe against America. However, this strategy proved ineffective. What outcome can China expect if it employs the same tactic this time?

In Gibbs' view, the answer to this question holds little suspense. He told Forbes: "What we saw during Trump 1.0 was that China's (the Chinese government's) performance was not very effective. Early in the Trump 1.0 era, China took a step towards Europe with a trade proposal, but Beijing did not effectively pivot to the European market. This is not entirely surprising, as the issues are consistent—dumping, subsidies, and other unfair trade practices. European governments reacted almost the same way as the U.S. government. Will Beijing learn from this and act more effectively during Trump 2.0?"

Trade Becomes the Core of U.S.-China Relations in Trump 2.0 Era

The Chinese Communist authorities, particularly under Xi Jinping, have repeatedly emphasized that the Taiwan issue is the core and most important issue in U.S.-China relations. However, with Trump’s re-election, the Japanese business newspaper Sankei Shimbun published a report on November 6th, pointing out that trade appears to be the central issue in U.S.-China relations at present. The report stated:

"Whether the Republican former President Trump or Democratic Vice President Kamala Harris won the U.S. presidential election, the common view in China is that U.S. pressure on China would not ease…

"China (the Chinese government) is nervous about the 'uncertainty' Trump displayed during his first term. Trump has announced plans to impose 60% tariffs on Chinese goods, which, if implemented, would be a significant obstacle to China’s faltering economy. Regarding Taiwan, which China (the Chinese government) considers a 'core interest,' Trump has stated that if China (the Chinese government) invades Taiwan, he would impose '150% to 200%' tariffs."

Japan’s main newspaper, Yomiuri Shimbun, published a report on November 6th, the day after the U.S. election, highlighting the starkly different reactions on both sides of the Taiwan Strait to Trump’s re-election. The report said:

"On November 6th, Taiwan President Lai Ching-te, under threat from China (the Chinese government), congratulated Trump on his victory using his social media X account. Lai posted in both English and Chinese: 'I believe that the long-standing cooperative relationship between Taiwan and the U.S., built on shared values and interests, will continue to be the cornerstone of regional stability and lead to further prosperity.'

"Meanwhile, Chinese Foreign Ministry spokesperson Mao Ning declined to comment during a press conference on the 6th. She stated, 'The presidential election is an internal affair of the United States, and we respect the choice of the American people.' "