The reasons why China is firmly unwilling to back down in the trade friction with the US.

Many people are puzzled as to why China is so stubborn in the trade friction with the US and cannot compromise to protect people's livelihoods. This view only sees the surface and ignores China's real cards in the current game.

As early as 2018, considering the stability of domestic livelihoods, China rationally backed down and signed the "Phase One Agreement" with the US. However, the US did not restrain itself as a result; the tax increases have become even more severe, with tariffs now soaring to a staggering 104%. If China compromises again at this time, it would undoubtedly fall into the predicament of "losing both the wife and the soldiers," having to pay huge taxes for nothing, and would completely lose its dominant position in the global economic order. This time, China is absolutely unwilling to back down, backed by solid and profound logical support.

Why not back down?

1. Tax revenues are solely taken by the US, and China suffers losses.

$500 billion in exports are subjected to $250 billion in tariffs, which is equivalent to giving money away for free. China only earns a small portion of this, which is far less than using this money to stimulate domestic consumption.

2. Even with tariffs, Chinese products remain irreplaceable.

For example:

A coffee cup from Zhejiang costs $0.8 at the factory, while the US selling price is $48.

Bluetooth headphones have a factory price of $3, but the US price is $22.

An LED bulb in China costs $0.5, while in Canada it can go up to $22.

An air fryer is priced at 59 yuan in China, but is marked at $499 in the US.

These "outrageous price differences" indicate that Chinese manufacturing is still a necessity. Tariffs cannot completely sever the supply.

3. The real impact is on American brands.

A large number of mobile phones and electric vehicles exported from China are actually produced by American companies such as Apple and Tesla. Hitting Chinese manufacturing ultimately cuts the roots of American companies.

Three main supports for China's tough stance

1. Leap in energy independence.

The penetration rate of new energy vehicles in China has exceeded 50%, and reliance on oil has sharply declined, making energy blockades less effective.

2. Technological blockades have been reversed.

China has made significant progress in fields such as semiconductors, aerospace, and operating systems. Once blocked technologies like HarmonyOS and BeiDou have now become domestic pillars, with technological blockades turning into incentives.

3. Huge potential for domestic demand.

China is transforming into the world's largest consumer market. If domestic demand can be stimulated through policy measures, it will attract global attention and reshape discourse power.