Tariff War: Xi Jinping Raises the White Flag While Singing Victory Songs, Wang Xiaohong Returns in Defeat

Trump employs tariffs to strike at the red dragon. (People News graphic)

[People News] With the conclusion of the first round of U.S.-China talks in Geneva on May 12, the sudden halt to the erupting U.S.-China trade war and the unexpected handshake and "truce" between the two sides shocked and stunned the world. After issuing a joint statement, both countries rushed to proclaim victory for themselves.

Unlike the U.S., the Chinese Communist Party (CCP) launched an exaggerated propaganda campaign akin to an overdose of adrenaline, unleashing a brutal and frenzied wave of nationalism. They portrayed the Geneva trade agreement framework as a massive victory for Xi Jinping in his confrontation with the U.S., going so far as to unilaterally claim the truce as evidence of America’s surrender and submission.

Narratives like “America has surrendered” and “Trump’s strategic blunder” flooded social media. Faced with a surge in hyper-nationalistic sentiment and calls for struggle from China’s youth and “Little Pinks,” the state media quickly shifted its tone from “We won’t kneel” to “Only by standing tall can we beat the U.S. down,” offering the public a customized dose of brainwashing climax supplements, marching forward with high praise, composing a grand internal political victory song.

Tough talk with soft legs, signalling left but turning right, waving a white flag while singing victory—this has always been the CCP’s posture on the international stage. Whether the emperor has new clothes doesn’t matter—saving face is the priority. Whether China has the strength for a trade war isn’t the issue—pretending to be defiant is. Whether they suffer losses in negotiations doesn’t matter—as long as they wave the white flag to the outside and sing victory songs internally.

Take the frenzied boasting of former Global Times editor-in-chief Hu Xijin, for example: “It signals the end of the era when the U.S. believed it could blackmail China from a position of strength.” “China has pierced through many of the smokescreens released by the U.S.” “Both sides made equal, significant tariff reductions.” “The Geneva outcome is a great victory for China's insistence on equality and mutual respect.”

But even elementary school students can do the math on the tariff agreement. So why can’t the CCP’s media elites and economists? Before the Geneva talks, the highest tariffs reached 145% on the U.S. side and 125% on China’s. The extra 20% imposed by the U.S. was related to China’s export of fentanyl to the U.S., as initiated by Trump.

The Geneva results showed that both sides agreed to reduce 115% of tariffs: 24% in equal tariffs and 91% in retaliatory tariffs. The 91% retaliatory tariffs were entirely self-inflicted by the CCP. On April 2, “U.S. Liberation Day,” Trump raised tariffs on Chinese imports by 34%—a so-called equal tariff—and U.S. Treasury Secretary Bessent explicitly stated that these were baseline tariffs applied to all nations. If no retaliation occurred, they’d remain capped; if retaliation occurred, the U.S. would raise them further.

To display the narrative of "East rising, West declining" and manipulate nationalist fervour, Xi Jinping insisted on a hardline stance as the world's only one willing to confront the U.S. head-on. As a result, tariffs between the two countries rapidly escalated within a month. In April, China’s manufacturing activity suffered the sharpest monthly contraction in over a year, with the PMI dropping to 49.0 and new export orders falling to their lowest levels since the COVID pandemic. Many exporters in textiles and consumer goods were forced to halt operations, facing factory closures and 10–20 million job losses.

During the G20 Finance Ministers' Meeting in April in the U.S., a Chinese delegation was caught on camera by JoongAng Ilbo sneaking into the U.S. Treasury building. Meanwhile, Beijing flatly denied everything, publicly waving the "fight to the end" banner. Just as the world was focused on who would kneel first in the U.S.-China trade war, news emerged that Xi had sent his close ally Wang Xiaohong to the U.S. for fentanyl-related negotiations. Soon after, the Chinese Foreign Ministry announced that, under strong U.S. pressure, China had agreed to hold talks in Geneva.

On the first day of talks, Trump posted on social media that there had been substantial progress. He and Bessent remained optimistic throughout. In contrast, Xi Jinping and the six other Politburo Standing Committee members stayed completely silent. If China had truly stood tall and refused to fall, as state media claimed, would Xi not have flaunted it in his little notebook?

Xi’s retaliatory tariffs brought a brutal U.S. counterattack, leaving him bruised and eventually compelled to quietly back down and return to the table. The Geneva agreement essentially resets things to where they were on "U.S. Liberation Day"—the U.S. retains 30% tariffs on China, and China retains 10% on the U.S. To test the strength, both sides went for a spin, and the result proved that the CCP wasn’t a mule or a horse, but a pure, dumb donkey.

The Geneva agreement covers more than just tariffs. China promised to cancel non-tariff retaliatory measures implemented after April 2, meaning its rare earth export restrictions against the U.S. may be partially or fully lifted. Boeing aircraft and parts may re-enter the Chinese market. China also agreed to lift sanctions on U.S. companies. In terms of small-value goods exemptions, U.S. tariffs remain at 54% with an added $100 specific duty, severely cutting into Chinese cross-border e-commerce profits. Platforms like SHEIN and Pinduoduo now face a dilemma: too costly to keep, but too valuable to abandon.

Don’t forget—Trump’s original tariffs were never repealed by the Biden administration; enforcement just weakened. The Geneva agreement does not cancel the 25% tariffs imposed during Trump’s first term. Adding the new 30% tariff, the total on Chinese goods now stands at 55%. U.S. sector-specific tariffs—such as the 100% on EVs and 25% on steel and aluminium—also remain in effect.

Importantly, Trump’s trade war was never just about tariffs. The main goal was equal market access and fair trade. Currently, Trump has given Xi a 90-day reprieve—a sort of bail release secured by unequal concessions. If the CCP fails to structurally reform, harsher measures may follow. Avoiding this round won’t prevent the next.

On May 13, Xi participated in the fourth ministerial meeting between China and the Community of Latin American and Caribbean States (CELAC), still plotting his own petty schemes. He appeared dissatisfied with the Geneva deal, possibly seeking other ways to confront the U.S. There are rumours that He Lifeng led the Geneva delegation under orders from CCP elders, not Xi himself, suggesting Xi’s weakened political position forced him to accept the outcome. If He Lifeng betrayed Xi, it indicates Xi’s power is collapsing—from “one man above all” to isolated and helpless.

Worth noting: Of the 30% tariffs the U.S. retained, 20% target China’s failure to address fentanyl. This suggests Public Security Minister Wang Xiaohong’s Geneva mission ended in failure—he achieved nothing and possibly made things worse. At a press conference on May 14, Foreign Ministry spokesperson Lin Jian again blamed the U.S. for the fentanyl problem, seemingly still trying to provoke an “opium war” with the U.S. This hardline approach likely comes from Xi himself, who still controls foreign affairs, propaganda, and the security apparatus. His anti-U.S. obsession persists—cornered and desperate, he seems determined to crash through the wall. Once the 90-day reprieve ends, it’s entirely possible Trump will put Xi back behind bars.

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(First published by Renminbao)