How China Views Trump’s Tariffs: Calculated Response or Waiting Game?

China’s Strategic Silence Amid U.S. Tariffs: Opportunity or Tension?

February 4, 2025

China, if upset by the recent imposition of an additional 10% tariff on its goods by the United States, seems to be doing an excellent job of concealing its frustration.

Following the announcement of tariffs, both Canada and Mexico vowed retaliation. Canadian Prime Minister Justin Trudeau firmly declared that his country would "not back down," as he unveiled a 25% tariff on U.S. products. Subsequently, President Donald Trump agreed to temporarily suspend tariffs on goods imported from both nations after reaching a deal. However, the tariffs on China, which were set to take effect on Tuesday, remain intact.

When Trump first initiated a series of tariffs in 2018, China made it clear that it was "not afraid of a trade war." This time around, Beijing is calling for talks with Washington, with reports suggesting that phone discussions between Trump and Xi Jinping might occur later this week.

Despite the growing tensions, it appears that the 10% additional tariffs on China will continue. The Chinese government remains largely quiet, perhaps in an effort to avoid alarming its citizens, many of whom are already concerned about the economic repercussions.

China’s economy no longer depends on the United States in the same way it once did. Over recent years, Beijing has strengthened its trade agreements with nations across Africa, South America, and Southeast Asia, becoming the largest trading partner for over 120 countries.

The additional 10% tariff may not deliver the political advantage Trump hopes for, says Chong Ja Ian of Carnegie China. "China believes it can endure the 10% tariff, which is why it is silent—unlike Canada and Mexico," he says. "There's no reason for Beijing to clash with the Trump administration unless there’s a real gain in it for China."

A Strategic Pause: Xi Jinping’s Calculations

President Xi Jinping may have another motive for his country’s measured response: he might see an opportunity to strengthen China’s global position. As Trump stirs division within the United States and threatens to impose tariffs on the European Union, other American allies may begin to question what lies ahead for them.

In contrast, China may want to project itself as a more stable, consistent, and potentially more attractive partner for international trade. "Trump’s ‘America First’ policy is creating challenges and threats for almost every country in the world," says Yun Sun, director of the China program at the Stimson Center. "From a competitive standpoint, the diminishing trust in the U.S. will benefit China."

As the leader of the world’s second-largest economy, Xi has made no secret of his ambitions for China to take a leadership role in global affairs. Since the end of the COVID-19 pandemic, he has traveled extensively and strengthened key global institutions like the World Bank and the Paris Climate Agreement. State-run media in China have portrayed these moves as efforts to embrace countries globally and bolster diplomatic ties.

In 2020, when Trump halted U.S. funding to the World Health Organization (WHO), China pledged additional financial support. There is growing anticipation that Beijing might again step in to fill the gap left by the U.S. withdrawal from the WHO, despite the challenges facing its own economy.

On his first day back in office, Trump also halted all U.S. foreign aid—something that placed a strain on America’s reputation as the world’s top donor. While some aid programs have since resumed, experts like John Delury, a historian at Yonsei University, argue that Trump’s “America First” approach undermines Washington’s global leadership. "By increasing tariffs on key trading partners and cutting foreign aid, the message is that the U.S. is no longer committed to international cooperation," he says.

For over 50 years, Beijing has actively sought to expand its role on the global stage. The current uncertainty, caused in part by Trump’s policies, could play directly into China’s hands, enabling it to cement its position.

New Alliances: Opportunities and Cautions in the Pacific

Many of America’s traditional allies, especially in the Pacific region, have reasons to work with Beijing but are also cautious. Nations like Japan, South Korea, the Philippines, and Australia have begun to strengthen their ties with China, driven by concerns about China’s growing power in the South China Sea.

Experts suggest that a trilateral alliance between Australia, Japan, and South Korea could emerge in response to the “Trump administration’s influence,” according to the Australian Strategic Policy Institute. The three nations share concerns about China’s military ambitions in the South China Sea and the potential for conflict over Taiwan.

Taiwan has long been a contentious issue in U.S.-China relations, with Beijing strongly opposing any U.S. support for Taipei. However, it may prove difficult for Washington to respond decisively to China’s provocations when Trump’s policies, such as threatening to seize Canada or purchase Greenland, are creating chaos.

Countries in the region have balanced their military relationships with Washington with their economic dealings with China. Yet, in light of the growing concerns about Beijing and the unpredictability of U.S. foreign policy, new regional alliances may emerge, independent of the major global powers.

Stability Before the Storm: China's Calculated Response

China’s response to the U.S. tariffs has been quieter than that of Canada and Mexico. The Ministry of Commerce has announced plans to take legal action, including filing complaints with the World Trade Organization (WTO). However, the WTO’s dispute resolution system has been effectively inoperable since 2019 due to the Trump administration’s block on judicial appointments.

At present, China’s silence may be a tactical decision to keep the door open for negotiations with Washington, hoping to avoid further tariffs and prevent the economic relations between the two largest economies from deteriorating even further.

However, some analysts believe that long-term stability is unlikely, given that both Republican and Democrat leaders in the U.S. view China as a significant challenge to foreign and economic policy.

“Trump’s unpredictability, his impulsiveness, and his administration’s failure to adapt will undoubtedly lead to shocks in U.S.-China relations,” says Wu Xinbo, a professor and director of U.S. Studies at Fudan University. "Moreover, his team includes hardliners whose views are more entrenched than those in China. It’s inevitable that the relationship between these two countries will face significant turbulence in the coming years."

China may be wary of the impact that a trade war could have on its already struggling economy. However, it is also likely to seize opportunities from the current tensions, leveraging the situation to strengthen its influence on the global stage.