According to Li, there was a widespread consensus in China that the U.S. trade war would persist under any administrationâ€"whether led by Joe Biden, Kamala Harris, or Donald Trump.
Speaking at a recent public lecture titled The Prospect of a New Stage of China's High-Quality Development, Li addressed the ongoing U.S.-China trade tensions, asserting that a full-scale trade war is now unfolding.
The event, attended by both local and international journalists, provided insights into China's strategic response and its focus on advancing high-quality economic development.
Escalating Trade Conflict
Since January 2025, the trade conflict between the United States and China has intensified. During his second term, the Trump administration incrementally increased tariffs on Chinese imports, starting with a 10% duty on February 4, followed by a rise to 20% on March 4.
These measures were part of a broader strategy to pressure China on issues such as intellectual property rights and what the U.S. perceives as unfair trade practices.
In response, Beijing has refrained from matching U.S. tariff increases one-for-one but has instead adopted a targeted and multifaceted retaliation strategy.
Chinese authorities have imposed tariffs of 10â€"15% on select U.S. agricultural products, affecting key exports like soybeans, chicken, and wheat. Additionally, China has implemented non-tariff measures, including suspending import licenses for certain U.S. firms and launching anti-circumvention investigations aimed at limiting U.S. access to its industrial supply chain.
'China has been preparing for this for the past six to seven years. Everybody in China knew that the U.S. trade war would continue under any administrationâ€"Biden's, Harris's, or Trump's. We knew this war was coming, and now it has arrived in full scale. We are looking at more tariffs, more policies, and more restrictions on Chinese goods,' Li stated.
Li emphasized that China's government remains patient and is willing to work toward mutual benefits for both the Chinese and American people.
'We are waiting for the Trump administration to present constructive proposals. Naturally, China must respond to tariff policies, but overall, I would argue that among the world's major economies, China is perhaps the most patient.'
According to Li, China has long anticipated and prepared for this phase of the trade war. He pointed out that trade with the U.S. now accounts for just 3.4% of China's GDP, a figure he suggests is not substantial enough to derail the country's broader economic trajectory.
With this in mind, he downplayed the impact of escalating tariffs and restrictions, framing them as challenges that China is well-equipped to navigate.
U.S. and Chinese Priorities
Li noted that President Trump is primarily focused on three key issues: tackling immigration, boosting job creation in key swing states like Michigan, Pennsylvania, and Ohio, and addressing the U.S. federal fiscal challenges.
Conversely, China's strategic priorities center on maintaining social and political stability, peacefully resolving the Taiwan issue, and sustaining economic growth.
'These three concerns are not diametrically opposed to Trump's top priorities. In economics, when two parties have different objectives, there is room for collaboration, negotiation, and communication. I remain hopeful that the Chinese government and the Trump administration will eventually find common ground and resolve seemingly unresolvable issues,' Li stated.
Li predicted that the world would be economically and financially divided into three major blocs.
He likened the division to the Romance of the Three Kingdoms, with the first bloc consisting of the U.S., Canada, and Mexico forming a relatively self-sufficient trade zone. The second bloc, according to him, would be Europe, which is now highly interconnected.
The third and largest economic bloc would consist of China, ASEAN countries, Belt and Road Initiative (BRI) nations, and Africa.
'As a result, we will see a significant increase in Chinese investment and technology flowing to African and Belt and Road countries. This will foster mutual economic benefits between China and these economies. In my view, the world is shifting toward a relatively divided structure with three distinct economic blocs,' he concluded.
Christian Mugisha
Source : https://en.igihe.com/news/article/decade-long-prep-china-s-economic-arsenal-for-us-trade-war
