THE gloves may be temporarily off between Washington and Beijing following President Donald Trump’s decision to exempt selected electronic goods from tariffs. However, while sanity returns to the White House, the damage has already been done.
President Xi Jinping did not blink when Trump levied 145% on Chinese goods entering the US. Dismissing Trump’s tariff ploy as a joke, Xi snubbed Trump by imposing a 125% (from 34% and 84%) levy on US goods entering China, valued at US$144 billion (RM636 billion) in 2024.
By upping the ante, China has signalled its willingness to forego trade with the US to protect its national pride. Xi must have reckoned that he could do without the US market as China expands its market access elsewhere in Europe, Africa, South America, the Middle East and Asia Pacific.
After Beijing refused to buckle under mounting pressure from US unilateral tariff imposition, the world took notice of China that vowed “to fight the US to the finish”.
Confident in the support for his leadership at home and downplaying the seriousness of the tariff tiff with Washington, Xi is in Malaysia for a three-day visit as part of his Southeast Asia trip.
After years in office, he must have realised Trump’s gruffness is not merely about sparking a skirmish over trade deficits but rather a challenge to China’s sovereignty, dignity, pride and a direct questioning of his leadership.
Had he flinched in moments of adversity such as this, more than a billion Chinese citizens may have seen him as weak and dispensable. Instead of capitulating to pressures, Beijing has embraced what looks like a long-term strategy, advocating for multilateralism, fair trade and mutual respect between nations.
By ordering massive dumping of US treasury bonds, Xi has exposed another weakness in the US financial system that China could easily exploit. When push comes to shove, he could dump some of China’s US$759 billion US Treasury holdings overnight – as Japan and Canada did.
Rather than escalate tensions through further rhetoric, Xi chose to handle the situation with calm and clarity. His message was simple: China would not be bullied.
Promising he would no longer engage in a numbers game with the US that would derail global markets, his action has won the respect of many in the global south as many view his calmness as a hallmark of confidence.
His strategic patience in turning a moment of crisis into an opportunity for China to reinforce its economic independence is appreciated by those felt betrayed by Trump who uses trade as a weapon.
At a time when unpredictability is the hallmark of Washington’s trade policy, Xi’s leadership offers stability – both to the Chinese people and to the international business community.
Trump framed the trade war to “rebalance” US-China relations but in practice, his approach is rooted in unilateralism.
The tariffs have been abrupt, the demands sweeping and the consequences far-reaching.
For many countries watching from the sidelines, this marks a troubling shift away from international norms that violate the international trading rules.
Xi’s resolve is not just rhetorical. His administration has accelerated efforts to reduce China’s dependency on US technology, launched reforms to support domestic consumption and expanded partnerships through initiatives like the Belt and Road. These moves were not just a reaction to the trade war – they reflect a broader strategy of resilience and leadership.
Xi does not view the trade war with Washington as a setback but as an opportunity. His refusal to yield under pressure sends a clear message to the world: China values dialogue but it will never be coerced. Under his leadership, China has doubled down on innovation, investing in advanced manufacturing, artificial intelligence and green technologies.
Unwavering under pressure, Xi’s approach speaks volumes of his leadership style. In the meantime, as geopolitical dynamics continue to unravel, China emerges more self-reliant, assertive and determined to chart its own course in the world economy.
Xi’s handling of the trade war with the US is a reaffirmation of China’s ability to navigate great-power competition without compromising its principles.
BA Hamzah was formerly a lecturer in geopolitics at the National Defence University Malaysia in Kuala Lumpur. Comments: [email protected]
