WASHINGTON—As the trade war between the United States and China intensifies, Beijing seems ready to use any means necessary to prolong the fight rather than concede.
Many in Washington argue that sustained high tariffs could ultimately end the trade relationship between the two countries and accelerate long-desired decoupling from China. Losing access to a large U.S. market would also significantly strain the Chinese economy.
Communist China’s rise since joining the World Trade Organization in 2001 has been mainly fueled by controversial trade policies, which include stealing intellectual property, attacking foreign firms operating in the country, and massively subsidizing domestic companies. Hence, Beijing is determined to maintain these mercantilist trade practices, according to Robert Atkinson, president of the Information Technology and Innovation Foundation, a science and technology think tank.
Even if Beijing comes to the negotiation table, it’s unwilling to bargain on these core problems that the U.S. government wants resolved, Atkinson told The Epoch Times.
“They’ve never been willing to even acknowledge that these are problems,” he said, adding that Beijing is willing to take trade war casualties at a dramatically higher rate than the United States is.
As of April 15, U.S. tariffs on many Chinese imports stand at 145 percent, while Chinese levies on U.S. goods are at 125 percent.
U.S. President Donald Trump has already signaled that he is willing to lower or pause tariffs if China agrees to negotiations. His offer was met with a public refusal from Beijing.
Circulating Propaganda Videos
For years, the CCP has used propaganda to influence public opinion both domestically and internationally. It’s now deploying the same tactic to shape public perception about Trump’s tariffs.According to “Shark Tank” investor Kevin O’Leary, the CCP’s latest trick involves a wave of TikTok videos that mock Americans and were generated with artificial intelligence (AI).
“TikTok is weapons-grade spyware, period,” O’Leary told lawmakers during a congressional hearing on April 9 about the CCP’s financial aggression.
“It’s one of the best propaganda machines I’ve ever seen,” he said of TikTok. “If you want evidence of it, go on in the last 24 hours and look at the videos generated there through AI of overweight Americans at sewing machines.”
He said that the CCP is behind these videos, which began circulating shortly after Trump’s April 2 tariff announcement. The AI-generated clips show overweight Americans hunched over sewing machines, scenes of Trump and his Republican allies slowly stitching fabric, and billionaire Elon Musk assembling iPhones on an assembly line. These videos end with Trump’s famous campaign message, “Make America Great Again.”
“I have never seen such blatant propaganda,” O’Leary said of recent videos, warning that Beijing also uses platforms such as TikTok to shape public opinion in the United States.
In January, O’Leary announced that he had placed a bid to acquire TikTok from its Beijing-based parent company, ByteDance. On April 4, Trump extended the deadline for the social media platform to break away from ByteDance by 75 days to avoid a ban in the United States.
The White House on April 15 responded to these viral videos, some of which were posted by Chinese government officials.
Pressuring American Companies
The Chinese regime also uses a familiar playbook: pressuring American companies to act as intermediaries.
On April 6, Ji Ling, Chinese vice minister of commerce, held a roundtable meeting with representatives from U.S. companies, including Tesla and GE HealthCare. During this meeting, Ji issued a subtle warning, urging U.S. firms to support efforts to influence Washington or face consequences such as retaliatory tariffs and export restrictions.
Ji told representatives of nearly 20 companies that U.S. tariffs violate international trade rules and harm the interests of all other nations.
This tactic isn’t new. During the 2023 APEC summit in San Francisco, Chinese leader Xi Jinping attended a private dinner with top U.S. executives to promote investment in China. The meeting occurred after the Biden administration prohibited some new U.S. investment in China in sensitive technologies.
Some speculated over the weekend that Trump has conceded to the demands of technology companies by providing some exemptions to Chinese-made smartphones and other electronics after the Trump administration exempted electronics from the reciprocal tariff of 125 percent.
For decades, the CCP has been pressuring foreign companies operating in China. The regime is expected to intensify these pressures in response to the new U.S. tariffs.
“They'll probably continue to punish American firms with bogus antitrust suits,” Atkinson said.
Restricting Rare Earth Exports
In response to U.S. tariffs, Beijing has introduced export restrictions on critical rare earth elements, metals, and magnets effective April 4.
“That’s a pretty serious vulnerability,” Atkinson said, noting that Beijing will play this card during the trade war against the United States.
In its latest move, Beijing has imposed controls on seven categories of rare earths, a decision that will affect defense manufacturers and the automotive and aerospace industries, according to Joshua Ballard, CEO of USA Rare Earth, a supplier of critical rare earth magnets.
“In short, China does not need to increase tariffs to push back in this trade war,” Ballard said in a statement emailed to The Epoch Times, adding that these export restrictions serve as a powerful leverage point over the U.S. economy.
He noted that the United States depends entirely on China for magnets, and under new rules, companies need special export licenses to ship them out.
“The U.S. government needs to surge support to the rare earth industry domestically to ensure our supply chain is built as quickly as possible,” Ballard said.
The move follows China’s export ban on three critical minerals—antimony, gallium, and germanium—initiated in December 2024 in response to former President Joe Biden’s technology restrictions on China.
Launching an International Charm Offensive
Xi is on a Southeast Asia tour this week, visiting Vietnam, Malaysia, and Cambodia as he seeks to promote China as a stable trading partner.While in Hanoi, Xi called for stronger ties with Vietnam and urged the country to resist “unilateral bullying.”
“I think really the big thing the Chinese are going to do, which is the biggest way they can hurt us, is to form alliances with our allies,” Atkinson said.
Beijing has also mounted a charm offensive in recent months to strengthen ties with Europe.
On April 11, Xi hosted Spanish Prime Minister Pedro Sánchez in Beijing and told him that there could be “no winners” in any trade war. During the meeting, he urged China and the European Union to join forces to protect globalization.
However, it’s unclear how the EU, which has accused China of being a key enabler of Russia’s war against Ukraine, will react to Beijing’s charm offensive.
In October 2024, the EU also increased tariffs on Chinese-built electric vehicles (EVs) to as much as 45.3 percent, after accusing China of dumping cheap, government-subsidized EVs on its market.
Many Republicans are confident that China, not the United States, will be isolated during this trade war.
“I think over the long haul, China will be shooting itself in the foot if they continue these unfair trade practices, so we’re really in the driver’s seat on this,” Rep. Rich McCormick (R-Ga.) told The Epoch Times’ sister media outlet NTD. “They will be isolated, not us.”
According to Christopher Balding, senior fellow at UK-based think tank the Henry Jackson Society, high tariffs will “bring U.S.–China trade to an absolute halt.”
“Trump wants to push a very deep, ongoing decoupling from China,” Balding told Jan Jekielek, host of Epoch TV’s “American Thought Leaders.”
Currency Manipulation
In response to new tariffs on Chinese goods, Beijing is likely to again rely heavily on currency depreciation to ease the economic impact of the levies.China has long used currency manipulation as a key strategy to boost its exports. By weakening the yuan against the U.S. dollar, Beijing makes Chinese goods cheaper and more attractive on the global market.
“Lots of countries basically artificially depress their currency in order to run these mercantilist trade policies,” Balding said.
He said that China’s huge trade surplus suggests that the country has engaged in severe currency manipulation.
During Trump’s first term, Chinese exporters were unable to pass on the cost of U.S. tariffs to consumers as they were aware that doing so could cost them access to the U.S. market. To absorb the hefty U.S. tariffs, Beijing used currency manipulation, subsidies, and other methods to help its products remain competitive in the U.S. market.
A 2023 analysis by the U.S. International Trade Commission concluded that Section 232 and 301 tariffs on more than $300 billion of U.S. imports had little impact on U.S. inflation. The study found that the tariffs led to a decline in imports from China and an increase in domestic production, while causing only minor changes in prices.
Massive Subsidies
China offers its companies a wide range of subsidies, from direct grants and tax breaks to low-cost financing, land, energy, and other essential inputs.“China’s practices are also difficult to track. Local governments play a key role in disbursing grants and tax incentives and China is unwilling to share details about them,” the report reads.
In addition, it said, “China’s use of below-market borrowing and equity is much more pervasive than in other economies.”
This is largely driven by state ownership in China’s banking system and widespread state investment in companies, according to the report.
In addition, the CCP owns a minority share in a growing number of private companies, which is called “golden share.”
These shares, typically equivalent to 1 percent, allow the CCP to have a seat on the board, voting power, and influence over corporate decisions.
Aside from subsidies, China has used cheap labor to outcompete other countries.
Despite China’s rapid economic growth over the past three decades, a large portion of the population remains poor because of the highly unequal distribution of wealth.
Transshipments
When Trump imposed tariffs on China during his first term, U.S. companies didn’t massively reshore production—they instead shifted supply chains to countries like Mexico and Vietnam. As a result, trade volumes from China to those countries increased, Balding said.While academic and policy research studies suggest most of the goods exported from Mexico and Vietnam to the United States were produced by local firms, there was also a rise in transshipment.
This practice involves Chinese goods being minimally altered or simply relabeled in Mexico or Vietnam before being sent to the United States.
Trump is now aiming to close these loopholes with new tariffs and has publicly called on Mexico to raise its tariffs on Chinese goods to stop China from using these countries as backdoors into the U.S. market.
Trump is expected to handle China differently this time, having learned from his first term, Atkinson said.
“Historically, when they’ve been dealing with prior presidents, including Trump in his first administration, they were able to pull the wool over presidents’ eyes, offering things and never living up to them,” he said, noting that Beijing promised to buy $50 billion worth of soybeans from the United States.
“They were serious last time, they said. And Trump’s not going to believe that this time.”
