Why China thinks it might win a trade war with Trump

The trade war is escalating, and fast. On April 8th Chinese officials vowed to "fight to the end" in the face of new threats from Donald Trump, made just hours earlier, having already promised to match American tariffs of 34%.

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With such an increase, China's tariff rate on American imports will reach 70%. Later the same day, the White House confirmed that it would return fire, with tariffs of 104% applying to Chinese goods from April 9th.

There is little to prevent decoupling between the world's two largest economies. Although Mr. Trump's intentions in unleashing the biggest disruption to trade in modern history are not fully clear, he seems less interested in striking a deal with China than ever before. All negotiations would be terminated if China imposes its levy of 34%, he said on his social-media site, when announcing the latest measures. Chinese officials call this a "mistake on top of a mistake", and have not ruled out talks. Their tough response nevertheless probably forecloses that possibility.

Until the recent escalation, Mr. Trump's tariffs on China had been met with a swift but blunted response. Chinese officials had been eager to show they would not be pushed around; at the same time, they were content to pick their punches, so as to limit self-harm and avoid further escalation. This, the thinking went, would allow for easier negotiations when the time came—a calculation that now appears to have been discarded.