China Faces Challenges in Sustaining a Long-Term Conflict with the US and the West

On Monday, China’s Ministry of Commerce issued a stern warning to the international community.

This came shortly after President Trump indicated that countries might have to choose sides between the United States and China, alongside administration officials revealing a strategy to utilize the president’s “Liberation Day” tariff threat to prevent China from rerouting exports to the US via other nations.

China’s reaction was unequivocal: “If this takes place, China will never acquiesce to it and will firmly enact reciprocal measures.”

“Submitting to pressure cannot secure peace, and yielding cannot earn respect,” the ministry cautioned.

This situation goes beyond tariff negotiations or trade agreements: As the US and the Chinese Communist Party remain entrenched in a global trade conflict, they expect the rest of the world to take sides in a potential new Cold War for the 21st century.

Washington certainly holds considerable leverage — nearly 20% of China’s GDP is contingent upon exports, with Beijing being the globe’s largest exporter.

While many US industries depend on this relationship, so do millions of Chinese citizens. In 2023, around 120 million jobs in China — nearly 20% of the workforce — are linked to manufacturing.

Goldman Sachs estimates that between 10 million and 20 million Chinese workers depend on exports to the US.

Xi Jinping’s focus on production rather than consumption makes it difficult to swiftly pivot the economy to shield it from US tariffs.

However, the advantages gained in a trade conflict have a fleeting lifespan. Tariffs, being blunt tools, adversely affect both foreign exporters and domestic consumers.

Meanwhile, America’s trade deficit is not just sustained by inexpensive overseas manufacturing, but also by the status of the US dollar as the world’s reserve currency.

Just as Xi faces challenges transitioning from a production-based economy to one centered on consumption, Trump cannot revive US manufacturing in mere months.

This puts China on the verge of rising unemployment, while the US is preparing for increased prices and disturbances in the supply chain — leaving the global community eager to see who will yield first.

As both sides feel the rising pressure to negotiate, Xi is concentrating on a singular goal: drawing America’s allies and partners away from its economic — and eventually, its political and military — sphere.

This strategy is understandable. Outside of Washington and Beijing, the rest of the world accounts for 44% of global GDP and 64% of trade.

Key among these neutral parties is the European Union. Academics from China’s Fudan University recently posited that Beijing has “a certain strategic window” to realign the EU’s stance, evidenced by its recent diplomatic efforts across Europe.

In essence, the trade conflict is just one arena within the larger cold war developing between the US and the CCP.

In these interconnected struggles, there can be only one victor, and all choices are fraught with difficulty.

Nations caught between America and China are acutely aware of this tension, as is the Trump administration.

Formally, Trump’s strategy appears sound: utilize Washington’s distinctive position in the global economy to finally hold China accountable for its unfair and predatory trade practices.

Yet, Trump risks alienating America’s allies and partners if he employs coercive tactics against them that are usually reserved for adversaries like the CCP.

Can America triumph in a cold war with a rival by threatening an economic confrontation with its allies? The answer to this question will shape the future of the global economy and the trajectory of geopolitics this century.

As this pivotal moment unfolds, Trump must do more than merely exercise economic influence; he needs to articulate a clear message to the American populace and the global community about the existential peril posed by the CCP’s economic reach to our lives and freedoms.

If Trump narrows the conflict to trade-related issues alone, he risks defeat.

If he broadens the scope and rallying the public around the CCP’s greater threat, he could harness unknown resolve among the American people — enhancing his chances of keeping America’s allies aligned with us.

Ultimately, Trump must discover strategies beyond trade to apply pressure on Beijing. This dispute may have started with tariffs, but it certainly will not conclude there.

China has already targeted significant US industries for retaliation, notably restricting rare-earth mineral exports to the US in order to disrupt our automotive manufacturers.

Trump could counter this by delisting Chinese firms from US stock exchanges and imposing sanctions on Chinese banks for various infractions.

This crucial moment in history necessitates strong leadership.

If Trump responds with clarity and honesty about the CCP, he could build a significant legacy — and Xi is acutely aware of this.

China might endure a trade conflict, but its fragile regime will likely struggle in a broader cold war.

Michael Sobolik is a senior fellow at Hudson Institute and the author of “Countering China’s Great Game: A Strategy for American Dominance.”