As former President Donald Trump escalates his tariff threats against China, Beijing is taking proactive steps to avoid a full-blown trade war by introducing its own restrictions and pushing for early negotiations with the incoming US administration. Learning from the previous trade conflict during Trump’s first term, China is now focused on securing leverage to initiate talks on key bilateral issues, including trade, investment, and technology.
This week, China began an investigation into US chip giant Nvidia over alleged antitrust violations and imposed a ban on exports of rare minerals to the US. These actions are seen as the beginning of negotiations rather than just punitive tariffs, with hopes for constructive talks on both sides.
Despite being better prepared for tariffs, China is not immune to the impact of a new trade war, especially in areas like advanced technology. The country still depends on critical imports from the US, such as high-tech equipment and microchips, and relies on American consumers for a large portion of its exports. Analysts believe China is keen to negotiate with Trump before he imposes additional restrictions on high-tech exports and to renew the US-China Science and Technology Agreement, which lapsed in August.
While China can offer incentives, such as increased purchases of energy, it is also prepared to use countermeasures if the US insists on further tariffs. US businesses in China are already feeling the pressure, with concerns about market access and potential bans on American products. With political factors complicating the trade relations, both sides face a delicate balancing act in the coming months.
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