‘No-one wins in a trade war’ – China warns Trump against crashing the global economy

China has fired back at President Donald Trump’s latest threat to slap a 10% tariff on all Chinese imports. In a statement released by its embassy in Washington, Beijing made it clear that such a move would be catastrophic for both nations and the global economy.

“China believes that economic and trade cooperation between the two countries is mutually beneficial,” said Liu Pengyu, the embassy spokesperson. He didn’t stop there. “No one will win a trade war or a tariff war.”

Trump, however, insists the tariffs will stay until Beijing stops the flow of fentanyl into the United States, accusing China of negligence in addressing the deadly drug crisis.

The new battleground

China pushed back hard against the allegations. Liu Pengyu called them baseless, arguing that Beijing has taken real steps to combat fentanyl production and trafficking. “The Chinese side has notified the U.S. side of the progress made in law enforcement operations against narcotics,” Liu said.

He added, “The idea that China knowingly allows fentanyl precursors into the United States runs completely counter to facts and reality.”

This issue isn’t new. Last year, Presidents Xi Jinping and Joe Biden agreed to resume joint efforts against drug trafficking. Progress has been slow but visible. China announced tighter controls on three key chemicals used to produce fentanyl. It also joined the U.S. in a rare joint investigation targeting drug smuggling operations.

Yet Trump isn’t satisfied. He accused China of failing to enforce harsher penalties, such as the death penalty for traffickers. For Beijing, this criticism feels like a slap in the face, especially given the steps already taken to address the issue.

Economic tensions reach boiling point

China’s economy is already feeling the heat, and Trump’s tariff threats are adding more fuel to the fire. The proposed 10% levy isn’t a small change—it’s a direct attack on China’s trade dominance. Beijing knows it has to tread carefully. Escalating tensions could further strain its economy, which is struggling to recover from global market disruptions.

Beijing’s response has been cautious. Analysts believe China is waiting to see how Trump balances confrontation and dealmaking in his second term before deciding on its next move. Deborah Elms, head of trade policy at the Hinrich Foundation, said, “This latest salvo from Trump is just a reminder to take him seriously.”

But China isn’t sitting idle. Beijing is focused on asymmetrical responses instead of direct retaliation. Zhu suggested China double down on “win-win” cooperation with other countries to counter Trump’s “America First” policies.

Xi, for his part, has made his position clear. In his last meeting with Biden, the Chinese president warned America against starting a new cold war, calling it a lose-lose scenario. “Containing China is unwise, unacceptable, and bound to fail,” he said.

The long game: Geopolitical strategies at play

Beyond the trade war, this dispute shows deeper geopolitical competition. Washington has long viewed Beijing as a threat to its economic and national security.

From military alliances in the South China Sea to restrictions on advanced AI chip exports, the U.S. has taken steps to curb China’s influence.

Beijing sees these moves as part of a broader strategy to contain its rise. Trump’s plans to appoint hawkish advisors like Marco Rubio and Michael Waltz signal a more aggressive stance in his second term.

Lyle Morris from the Asia Society’s Center for China Analysis believes Trump will lean on these advisors to shape a hardline China policy.

Despite these challenges, China has been careful not to get drawn into U.S. domestic politics. During the recent U.S. presidential election, Beijing refrained from showing a preference for either candidate, avoiding accusations of meddling.

The Chinese Embassy said, “Taking unscrupulous actions against China does not prove the strength of the United States, but only reveals that the US has lost self-confidence. It does not solve the U.S.’s own problems, but will further impede the normal functioning of global industrial and supply chains. It will not stop China’s development and rejuvenation, but will only spur the Chinese people to forge ahead with greater determination.”

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