The Economist: Why China believes it can win the trade war with Trump.

The Economist published an article discussing the possibility of China's victory in the trade war with the United States. Despite the escalation of the conflict and the introduction of tariffs, Chinese authorities are confident in their victory.

After Donald Trump announced an increase in tariffs on Chinese goods, Chinese officials stated their readiness to fight to the end. They believe they can exert significant leverage over the United States, such as control over fentanyl precursors and the ability to help resolve the conflict between Russia and Ukraine. Moreover, the vulnerability of American companies like Tesla can serve as an additional tool to pressure the United States.

Chinese officials are convinced that the American economy will not withstand the inflation and economic discontent arising from Trump's tariffs. They hope that the United States will be forced to sit at the negotiating table if consumer prices begin to rise or employment declines.

Possible Measures from China

China is preparing for the economic consequences of the trade war. Among the possible measures are lowering interest rates and bank reserve requirements, reducing tariffs for other countries, as well as increasing export subsidies. Chinese authorities have already taken initial steps to support the economy, but economists fear that the stimuli for the real economy will arrive more slowly and act fragmentarily.

China is considering various options to respond to the trade war. Among them are stopping cooperation with the United States regarding fentanyl, banning the import of American poultry and other agricultural products, limiting the activities of American consulting and law firms, and checking intellectual property rights held by American companies.

Chinese experts even consider the possibility of restricting the import of American films or banning them completely.

If the trade war continues, China will have to face the reality of an economic rupture with the United States, which it previously dismissed as a means to punish the PRC.