Donald Trump’s tariffs on Chinese imports to America rose by 10 per cent last week, taking them to 20 per cent in about a month. His pretext was the inflow to the US of the drug, fentanyl, which the White House sees as China’s fault. The response from China’s embassy in Washington was swift. In a tweet, a Chinese Communist Party (CCP) spokesman dismissed fentanyl as a ‘flimsy excuse’ to raise tariffs, protested that Beijing had taken robust steps to assist the US in dealing with the issue, and signed off: ‘If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight until the end.’
The ‘any other type of war’ quip has raised more than a few eyebrows. At one level, China’s forthright stance is nothing new. In the face of Washington’s ‘pivot to Asia’ (really, its pivot against China) from the mid-2010s onwards, China has been fighting back, including by battling for territory in the South China Sea. And after Trump ramped up a trade war during his first term, China played tit-for-tat, responding to a 25 per cent US tariff on $34 billion of its products with an identical measure in 2018.
This time, however, the geopolitical context is different from Trump’s first term. Trump’s effective abandonment of Ukraine has weakened America’s relationship with its Western allies – it also suggests the US might not help Taiwan defend itself should China do what Russia did to Ukraine and invade. Meanwhile, Beijing has increased its power and influence in the Indo-Pacific and Latin America. As a result of perceived American weakness, and China’s growing strength, China’s leadership feels more confident than it did even just a few years ago.
Taiwan remains the flashpoint. Its dominance of the global market in semiconductors, and America’s ongoing reliance on Taiwanese producers, make it important strategically and economically. Indeed, Taiwan has a $60 billion trade surplus with the US.
Yet President Xi’s designs on Taiwan are not born of so much of China’s economic interest or designs on its semiconductors. Indeed, the Taiwan Semiconductor Manufacturing Company would likely be destroyed during an invasion. China’s aim, as Premier Li Qiang put it, is to ‘firmly advance the cause of China’s reunification’ and to uphold national pride. To this end, it has recently boosted defence spending by more than seven per cent.
At a global level, China continues to expand its influence. It takes nearly a 10th of new car sales in Mexico and has Brazil’s president, Luiz Inácio Lula da Silva, on its side. In Africa, China is extremely active in fossil-fuel extraction, dams and major infrastructure. In the South China Sea, there is barely a spot of sand to which Beijing has not laid claim, from the Paracel Islands to the tiny Second Thomas Shoal in the Spratly Islands, currently controlled by the Philippines. The CCP is also becoming more involved in Papua New Guinea and the Solomon Islands.
Even Britain is not immune to CCP influence. Beijing wants the largest embassy in Europe to be sited at Royal Mint Court in London – and UK foreign secretary David Lammy has already given his approval. At British universities, China’s Confucius Institutes are thriving. Meanwhile, the CCP harasses dissidents in the UK.
In the field of technology, China continues to advance. In artificial intelligence, China’s relatively cheap DeepSeek software has given America’s Silicon Valley a fright. Many in the West are also worried about Beijing’s potential dominance of the electric-vehicle market, which some even consider a threat to national security, given the amount of personal data cars now store.
Economically, China is still thriving. It may suffer from overcapacity in its factory and property sectors, which is leading to deflation. But none of China’s cities nor infrastructure suffers anything like the decay evident in America. Growth may have slowed to just under five per cent, but this is still higher than the US and other industrialised economies. As for debt, in 2024, China’s stood at 90 per cent of GDP, while America’s reached more than 120 per cent.
Still, Western fears of China’s willingness to wage war are often overblown. If we look at military spending, for instance, there is little contest: at market exchange rates in 2023, China spent just under $300 billion, while the US spent more than $900 billion. Not that this is a surprise. Ever since the Reagan administrations of the 1980s, the US has often used martial strength to try to compensate for economic weakness.
As it stands, the CCP may well be prepared to wage ‘any’ type of war, although the US remains by far the world’s dominant military power. China is certainly gaining ever more economic and technological ground on the US, and it’s playing a greater role in the affairs of other nations and regions around the world. Yet the greatest source of global instability lies not in China’s rise, but in America’s weakness. Trump’s unpredictability is the least of its problems.
James Woudhuysen is visiting professor of forecasting and innovation at London South Bank University. He tweets at @jameswoudhuysen
