The CCP’s Calculated Gamble: Why Beijing Is Escalating Its Trade Fight With Trump Admin

An aerial view of Xiasha Container Terminal on a canal in Hangzhou, Zhejiang Province, China, on April 6, 2025. Chinatopix Via AP

Commentary

The total U.S. tariff rate on Chinese goods is a whopping 145 percent as of April 11. President Donald Trump has been back in the White House for less than three months. So why have tariffs on China reached such an unprecedented level?

First, Beijing has refused to curb the flow of fentanyl into the United States. For years, the precursors used to manufacture the deadly drug have originated in China. While the Chinese regime could have intervened to stop the exports, it has chosen not to. Why?

The Chinese Communist Party (CCP) was using fentanyl as a bargaining chip to pressure Washington. But the Trump administration decided that enough was enough, so it significantly increased the tariff rate on Chinese goods. The 145 percent tariff includes the previous 20 percent related to fentanyl trafficking into the United States.

Second, Beijing has so far refused to negotiate with Washington on reciprocal tariffs. On April 2, Trump invoked the International Emergency Economic Powers Act, a 1977 law authorizing the president to impose trade restrictions on foreign countries. He also introduced reciprocal tariff measures against dozens of countries, setting China’s reciprocal rate at 34 percent, which was not the highest.

These tariffs are not intended as an ultimate solution; instead, they serve as a tool to encourage trading partners to come to the negotiating table in order to eliminate tariffs and nontariff barriers against the United States.

In fact, most countries targeted by the reciprocal tariff policy are open to negotiating with Washington. In an April 9 post on his Truth Social platform, Trump said that “more than 75 Countries” had contacted U.S. officials to discuss tariffs. Treasury Secretary Scott Bessent told Fox Business that Trump was “going to be directly involved in those negotiations.”

Trump met with Israeli Prime Minister Benjamin Netanyahu, the first foreign leader to engage directly with Trump on trade. Netanyahu agreed to eliminate Israel’s trade deficit with the United States, dismantle trade barriers, and drop tariffs on U.S. goods.

Third, the main reason could be Beijing’s defiance. In responding to the U.S. tariffs, the Chinese Ministry of Commerce released a statement declaring that it would “fight to the end.”

The CCP retaliated with 125 percent tariffs on U.S. goods on April 11. It also banned 12 U.S. companies from conducting import-export business with China and imposed new export controls on seven rare earth elements.

Bessent had previously warned U.S. trade partners: “My advice to every country right now is do not retaliate. Sit back, take it in, let’s see how it goes, because if you retaliate, there will be escalation. If you don’t retaliate, this is the high-water mark.”

These developments illustrate how the CCP has repeatedly dismissed Washington’s core concerns, rejected invitations to negotiate, and remained committed to a combative, “wolf warrior” posture—risking a full-blown trade war with the Trump administration.

Beijing’s strategic thinking, in my view, seems to be as follows.

First, Beijing views the United States, particularly the Trump administration, as the main obstacle to achieving its global ambitions and believes that this administration understands the true nature of the CCP. Consequently, Beijing is determined to disrupt, weaken, and undermine the Trump presidency. The Chinese regime hopes that after four years, when Trump’s term ends, a new U.S. administration might take a more conciliatory approach, allowing the CCP to adjust its strategy accordingly.

Second, the Chinese regime is also betting on U.S. domestic challenges. The U.S. economy faces inflationary pressures, and its gross national debt has surpassed $36 trillion—annual interest payments now exceed defense spending. Trump’s push for reindustrialization has produced mixed results, and the goods deficit hit a record $1.21 trillion in 2024.

Meanwhile, Trump’s sweeping policies have faced criticisms and challenges—conditions that Beijing believes could severely limit his effectiveness.

Third, Trump’s broad-based policy on reciprocal tariffs is designed to reset the global economic order, dismantle entrenched trade norms, and put pressure even on close allies, which could leave many countries alienated. The CCP sees this as an opportunity to garner support. It seems to believe that taking a hardline stance against the United States can rally other countries into a broader international “united front” against Washington, chip away at U.S. influence, and further isolate the United States. But this geopolitical gamble is unrealistic—wishful thinking at best.

Beijing has misjudged China’s economic power while underestimating the United States. The gross domestic product (GDP) gap between the two shrank from $11.1 trillion in 2007 to $5.9 trillion in 2021. But since 2022, the gap has widened, reaching $10.3 trillion by 2024. China’s GDP, which peaked at 75.3 percent of the U.S. GDP in 2021, dropped to 64.86 percent in 2024, fueling talk of China’s economic “peak” since 2023.

Official Chinese data show that the U.S. share of China’s foreign trade dropped to 11.2 percent by 2023 from 14.2 percent in 2017, while China’s export share in global markets rose to 14.2 percent from 12.8 percent. This suggests economic resilience, but this trend is not sustainable. China’s trade surplus has soared, hitting $992.2 billion in 2024, fueling international concerns about the country’s overcapacity issue.

Meanwhile, the United States, the world’s top consumer market, imported about $3.29 trillion worth of goods in 2024—accounting for about 15 percent of global imports—despite a record $1.21 trillion trade deficit, making it an economy that no nation can afford to decouple from.

Against this backdrop, the CCP’s push for an anti-U.S. international coalition seems absurd. When asked during his meeting with Netanyahu whether U.S. tariffs might drive trade partners toward China, Trump shrugged it off, saying: “I am not worried about it. They want to be in the hands of the U.S. They don’t want to be in the hands of the Chinese.”

Although the United States has its own issues to address, its economic foundations remain strong. Trump’s economic reforms may be difficult in the short term, but they are intended to promote long-term growth. In contrast, China’s economy has significantly declined since 2022, and with Beijing’s unpredictable policies, it is likely to deteriorate even further. A trade war with the United States will only exacerbate the situation.

The Chinese regime has focused on U.S. vulnerabilities while neglecting its own critical weaknesses. By choosing to escalate a trade conflict, the CCP is not acting strategically—it is courting disaster.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.