
The News
China showed no sign of relenting in an escalating trade war with the US, raising duties on US goods to 125%.
Beijing also filed a complaint with the World Trade Organization and dismissed Washington’s ever-higher levies — now at 145% — as “a joke”: The Chinese foreign ministry shared a Korean War-era video on social media of Mao Zedong vowing to never give up.
Though Beijing has powerful cards to play in the standoff, its already slowing economy’s dependence on exports leaves it vulnerable to other countries’ protectionism.

SIGNALS
The US’ ‘radical decoupling’ from China may be underestimating Beijing’s hand
US President Donald Trump’s economic offensive against China amounts to a sudden “radical decoupling” of the world’s two largest economies, historian Adam Tooze wrote. Trump’s moves reflect how his “trade policy and anti-China policy have converged,” Tooze wrote, with the underlying logic being to “shake the world, flush out and isolate China.” However, China could come out on top in an escalating trade war, analysts said. Beijing possesses the advantage of scale that Washington does not, two Biden officials argued in Foreign Affairs: “Two facts can be true at the same time: that China is slowing economically and that it is becoming more formidable strategically.” Trump’s aggressive duties are sharpening Beijing’s “survival instinct,” a China economist wrote in the Financial Times.
Chinese economists urge Beijing to boost domestic spending in the face of US tariffs
Several Chinese economists have publicly urged policymakers to focus on boosting domestic consumption in response to Trump’s tariffs. While a barrage of stimulus policies has helped lift consumer sentiment in China, analysts say recovery — which has been driven largely by the internet sector — remains tentative in the face of the intensifying trade war with the US, South China Morning Post reported. A Tsinghua University professor said that Beijing has already made its tit-for-tat approach to US duties clear: “If you raise tariffs on me, I will raise tariffs on you,” sending “a clear message to American businesses and the American public… to exert pressure on the White House.”
The two strongman leaders have a communication problem
While US President Donald Trump and Chinese leader Xi Jinping have signaled openness to negotiations, they have largely “been talking past each other,” CNN wrote. Communication through both official and unofficial channels has so far been unproductive, the outlet reported: “China’s reliance on strict protocol and desire to prepare Xi for any call of this magnitude is fundamentally at odds with how Trump does business.” Trump also does “not seem to understand Xi’s political realities,” The Atlantic wrote. Xi is seen as “the ultimate defender of the Chinese people,” unlikely to succumb to US pressure, and for talks to even begin, Xi will need to appear “at least the equal of Trump, if not the man in control.”