China has identified how to fight back against Trump’s tariffs, and is not ready to back down

Port shipments from China to the US are now on the decline due to the 145% tariffs imposed by Donald Trump. The port of Los Angeles, a major hub for Chinese goods, is expecting a significant drop in scheduled shipments in early May compared to last year. This decrease in imports could soon impact supermarket shelves across the US. Despite warnings from US supermarket executives, Trump mentioned ongoing trade talks between the US and China, though Chinese president Xi Jinping denied that any discussions were taking place, indicating a willingness to stand firm in the face of US pressure.

Xi Jinping, a prominent figure in Chinese politics, has cultivated a strong nationalist image, and giving in to US demands could damage his reputation. Trump, on the other hand, seemed confident at a recent rally, suggesting that China would eventually yield to the tariffs. While tariffs are a primary tool in the ongoing trade dispute, China may have other strategies to retaliate against the US.

The agricultural and energy sectors are likely targets for China’s retaliation. China has reduced its reliance on US farm products since the trade war began, affecting US farmers who have been hit with retaliatory tariffs and bureaucratic obstacles. These actions could have a significant impact on Trump’s support base in farming-dependent states. Additionally, Beijing’s shift to alternative natural gas suppliers has implications for the US energy industry, another key support base for Trump.

On top of these challenges, China’s restrictions on the export of critical minerals could pose a serious threat to US industries, especially in defense. China’s control over rare earth minerals used in manufacturing military technology could weaken America’s defense capabilities. As the trade war intensifies, the US faces the risk of losing access to crucial resources and technology.

Looking ahead, the US and China remain locked in a trade battle with escalating tariffs on both sides. China could further escalate tensions through measures like selling off US treasuries or increasing interest rates. While Trump’s term is limited, Xi Jinping’s presidency has no such constraints, allowing him to pursue a long-term strategy in dealing with the US.