Why is it that China can stand up to Trump, while all the other great powers (except Russia) can’t? If China can stand up to Trump, why doesn’t for example EU do that too, as it has an economy almost the same size as the US, calculated in purchasing power?
When there is this type of stand-off, in the short run much comes down to a calculation of how much damage each of the rivals can inflict on the other, not only economically but also in other aspects (not least technology). In the longer run, these calculations should be based on broader considerations, looking at longer term costs and benefits. But the ability to do that depends on the capacity of the adversaries to give priority to longer term benefits compared the immediate damage, that is on the ability to sustain short-term pain and the capacity to plan and wait for the longer terms benefits.
We should therefore look at two things: the immediate damage from a trade war (or broader conflict), and the longer terms benefit of taking a stand and not accepting being bullied, even if the immediate damage is considerable.
Let us start with China. We shall look at the EU in the next (upcoming) article.
China now is not what it was 20 years ago, or even 10 years ago. There is a quite good overview here. As the British daily Financial Times writes: “Unlike nearly 10 years ago, when Trump’s first trade offensive caught Beijing by surprise, this time a better prepared and economically more powerful China has been able to fight its once far mightier opponent to a standstill”.
Firstly, China is now much less dependent on exports to the US than before. 20 years ago, more than 20% of China’s exports went to the US, while in August 2025 it was down to 8% - and still falling. At the same time, China’s total exports are at a record high, with the ASEAN countries and the EU as the top destinations, but also with growing sales to Russia, Africa and Latin America. Part of this reduction of sales to the US may of course be due to a reorientation of products to other countries, which then will ship them to the US, but that doesn’t change the overall picture. Exports constitute around 20% of China’s GDP, so even a theoretical total stop for exports to the US would reduce the GDP with only 1.6%, unless these goods can still be produced and exported to some other country or consumed locally (which seems to be the case in 2025). Hardly earth-shattering.
China is the world’s biggest exporter. But less than 10% goes to the US in 2025.Wikimedia.
In the popular imagination, China is exporting toys and other low-tech items to the US, but the main items are actually consumer electronics, home appliances, medical instruments and so on. A part of these are US designed products, outsourced for manufacturing in China. Stop for these imports to the US will therefore hurt these US companies as well.
Secondly, China is now much less dependent on US technology. China launched in 2014 the 10-year programme “Made in China 2025” with very ambitious goals (which called down the ire of the US). I wrote about it back in 2018 under the title: “Why does the US hate “China 2025”?”, and noted that “Success (for the programme) is absolutely not guaranteed, but past Chinese experience indicates they may be able to do it”. They were. The liberal Hong Kong newspaper “South China Morning Post” made a comprehensive analysis of the outcomes of the programme in April last year. They “compiled more than 260 goals previously proposed under the plan. These goals span 10 key areas, many involving highly specialised and complex technologies. And the analysis confirms that more than 86 per cent of these goals have been achieved, with some others likely to be completed in 2024 and 2025 later this year or next. Meanwhile, some of the targets, such as electric vehicles and renewable energy production, have been well surpassed.”
Chinas set ambitious goals in its 2015 strategy “Made in China 2025”. Now they have largely been achieved. Image from orcasica.com
I wrote last year about how China is not only catching up with the US in a series of technologies, but even surpassing it in some of them. In a 2023 study, the anti-Chinese think-tank called ‘Australian Strategic Policy Institute’ concluded that China leads in 37 of 44 technologies tracked by the Institute, including electric batteries, hypersonics and advanced radio-frequency communications such as 5G and 6G, and the US was the leader in just the remaining seven technologies such as vaccines, quantum computing and space launch systems. The report claims that their research ‘reveals that China has built the foundations to position itself as the world’s leading science and technology superpower, by establishing a sometimes stunning lead in high-impact research across the majority of critical and emerging technology domains.’
Where the US presently can inflict most short-term damage on China is within semiconductors, but they have already done that for the last 10 years by cutting China off from high-end chips and tools for chip making. There is therefore not really any new threat here. They can cut China off from the international financial system, but China has already shifted much of its international trade into its own currency, the Yuan. They can refuse to pay back the around USD 731 billion they owe China (as they did with Russia), but that is likely to create a more generalised world-wide repudiation of US financial assets, so it is a possibility, but not a particularly attractive option. One of the sectors where they really can hurt China is by blocking China from buying Western aircraft and spare parts for the ones they have already acquired (again as they did with Russia). They are supposedly considering that option. China is now producing its own analogue of Boeing 737 and Airbus A320, COMAC C919, but it uses Western engines and depends on many other Western components. The wide-body COMAC C929 is still in development and will likely not be available before around 2035 and then probably still with Western engines and many other Western components. That would therefore hurt. But it will hurt Boeing and Airbus too, as China is one of the biggest and fastest growing markets for civilian aircraft (and Airbus has an assembling line for the A320 in China).
COMAC C919, a Chinese analogue of Boeing 737 and Airbus A320 is a big step forward for China, but it unfortunately still depends on Western engines and other crucial components. A US stop for export of engines and spare parts for its existing fleet will not be funny. Wikimedia.
China has hit back at the US in several ways. They introduced reciprocal tariffs on US goods, stopped buying US commodities as oil, LNG, grain, soy beans, meat and so on, and chips from US company Nvidia, and finally they played their trump card: they refused to sell rare earth minerals, which are absolutely indispensable for the US military industry and many high tech products. That brought Trump to the negotiation table. US tariffs were lowered somewhat, and China promised to buy some agricultural products and sell rare earth minerals.
It has been called a landmark deal. It is nothing of the like. It is only a short term truce. It will take the US several years to find alternative providers of rare earth minerals, and in the meantime China will probably have less and less need for US technology. They can easily buy grain, soy beans, oil and gas somewhere else.
The difference between US’ and Chinese negotiation tactics is very clear. Trump is a deal maker, more of a poker player than a strategist. Xi is thinking long term. Trump needs immediate results as the 2026 midterm elections are coming closer. The Chinese would prefer to avoid short-term pain, but they are not afraid of it, if they can see the long term benefits. Trump is.
Treasury Secretary Bessent said recently that China’s ‘escalation’ (that is, reciprocal sanctions and tariffs against the US) was a ‘big mistake’, and that the country was playing with a ‘losing hand’ (note the poker language).
This only shows how the US is failing to understand how the world has changed. They don’t even notice their own losing hand.
