China believes it is winning Trump’s trade war

The most recent trade talks between the United States and China in Geneva and London provided little more than temporary relief in the conflict between the world’s two largest economies. Despite US President Donald Trump's efforts to tout the stopgap measures as a “deal” that benefits America, China reads the scoreboard differently — and believes it is winning. From its vantage point, it has weathered the storm and emerged more confident, more self-reliant, and more convvinced that its long game is paying off.

- Zongyuan Zoe Liu

Since the grinding Sino-American trade war began in 2018, China has crafted a playbook that blends defensive and offensive strategies to mitigate its vulnerability to tariffs and sanctions. On the defensive front, China has rerouted trade flows, developed hedge against the dollar-based global financial system, and accelerated investment in indigenous technologies. It has also made a concerted push to boost domestic consumption, although not as an end in itself but as a means to reinforce strategic sectors like artificial intelligence applications and green tech.

On offence, China has tightened export controls and demonstrated a readiness to retaliate swiftly and surgically. Chinese authorities’ response to the second Trump administration’s tariff threats and escalations reflects this tactical flexibility and steadfast resolve. Over recent months, China has hit back almost immediately, taken a hard line in negotiations, and generally refused to be cowed. It is not merely reacting to pressure; it is redefining the US-China trade conflict on its own terms.

Meanwhile, the Trump administration has — perhaps unwittingly — exposed the dependency of US industries on China for rare-earth minerals and other inputs. The disruption to bilateral trade triggered by Mr

Trump's tariffs has left US manufacturers scrambling and overpaying for materials. In implementing rare-earth export controls in early April, the Chinese government has discovered a powerful tool for inflicting pain on American businesses.