China continues to resist the tariff pressure from the United States. The government stimulus program implemented in response to the tariff restrictions from the U.S. allowed China to improve its economic indicators in the first quarter of 2025, surpassing market forecasts:
Retail sales showed the fastest growth since December 2023
Industrial production demonstrated the fastest growth since June 2021
Investment in fixed assets continued to grow in March
The unemployment rate in March decreased after reaching a two-year high in the previous month
However, the ongoing escalation of the trade conflict could negate all positive achievements. U.S. President Donald Trump, in response to Beijing's tough stance, decided to intensify pressure by initiating an investigation into potential new tariffs on imports of critical minerals, a significant portion of which comes from China. The leadership of the People's Republic of China regarded these decisions as 'mockery,' promising to fight 'to the end' with retaliatory measures.
Earlier, China had already resorted to export restrictions on a number of goods to the U.S. and suspended agricultural imports from the United States as retaliatory measures against tariff increases. Furthermore, the National Film Administration of China (CFA) announced plans to 'moderately reduce' the admission of Hollywood films to the Chinese market, believing that their popularity would decline due to the tariffs imposed by the U.S. The Ministry of Commerce of China, for its part, promised to assist foreign trading companies facing difficulties in exporting to navigate the domestic market of the People's Republic of China.
The trade conflict between two interdependent economies is gradually turning into an 'entertaining' competition of 'who can outlast whom.' Analysts note the tough stance of both sides, which reduces willingness to compromise and increases the risk of further escalation.
How long can China continue to uphold its position, considering that it essentially remains alone in direct confrontation with the U.S.? Other Asian countries, including Vietnam, Cambodia, and India, refrained from retaliatory measures and quickly expressed their readiness to ease tensions in relations with Washington. Moreover, Japan and South Korea have already sent official representatives to participate in discussions on this matter.
While the parties to the conflict boldly raise the stakes. However, there is a limit to everything, and negotiations will happen; the only question is when?