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news analysis
China chose swift retaliation for trade measures in the first Trump administration, but that led to an upward spiral of trade measures and much broader tariffs.
Feb. 2, 2025, 12:01 a.m. ET
President Trump’s decision on Saturday to impose new tariffs on imports from China poses a dilemma for Beijing’s leaders: Is it better to ignore the new tariffs or retaliate?
Doing little runs the risk of looking weak in the eyes of the Chinese people. China’s extensive domestic propaganda apparatus has described China as a rising power, while the United States is portrayed as suffering inexorable decline.
But vigorous retaliation risks starting a global trade war that could damage China more than the United States. China’s trade surplus — the amount by which its exports exceeded imports — reached almost $1 trillion last year. Exports, and the construction of new factories to make further exports, are practically the only area of strength these days in the Chinese economy.
China’s initial reaction on Sunday was cautious: the Ministry of Commerce said it would challenge the tariffs at the World Trade Organization. That body’s investigative panels can try to embarrass a country that violates international free trade rules, by criticizing a specific trade action.
But the W.T.O. has lost much of its power since 2019. The first Trump administration and then the Biden administration blocked the appointment of judges needed to authorize countries to take countermeasures.
Some in China had been relieved that Mr. Trump initially focused his criticisms on other countries. But few expected that to last.
