In 2025, trade tensions between China and the US escalated to unprecedented levels. President Trump’s recent 125% tariff levies on Chinese imports have raised some serious questions about China’s ability to withstand economic pressure compared to the 2018 conflict.
How China’s economic strength and trade policy evolved in 2025
China’s strategic preparation
Since the first trade war in 2018, China has been preparing for a potential new conflict. At the time of writing, these preparations have been tested in an ongoing trade war.
“The Chinese expert at Norwegian Arctic University,” said Mark Lanteinne, “The Chinese expert at Norwegian Arctic University.”
“China had a lot of time to prepare for the resumption of the trade war. They were caught a bit from the guard in 2018.”
Unlike other countries, China quickly responded to Trump’s first tariffs with a consistent measure and took additional steps to strengthen its position.
Xin Sun, a Chinese economy expert at King’s College London, said:
“China has retaliated, but all other countries prefer to take a very careful approach, prioritize or negotiate with the US.”
Reduced dependence on the US market
A key development in China’s trade relations is the decline in dependence on the US market, including Beijing’s shifting focus on other global partners.
Xin Sun explained:
“China’s reliance on exports to the US has been significantly reduced. In 2018, exports to the US accounted for around 20% of China’s total exports. That figure fell to about 14%.”
Johannes Petry Frankfurt of Goethe University added.
“China’s trade with the tropical world has actually overtaken trade with the G7. Compared to 10 years ago, it is less sensitive to US tariffs.”
Economic challenges
Despite better preparedness for this trade dispute, China faces economic vulnerability in 2025.
Johannes Petry observed:
“The weakness for China at the moment is that it is in an economic transition. The government is about to move the country from infrastructure spending and housing and real estate to a new growth model and move it to more technology.”
Ongoing tensions between the US and China put even more pressure on an already-transitioned economy. However, China has a fair amount of economic tools freely during this trade war. The government appears to be ready to use them when necessary.
Strategic Benefits
China retains significant leverage through control of rare earth minerals, which are important for high-tech manufacturing. This makes Beijing a key card in the US-China trade dispute, which was previously not fully utilized.
Xin Sun pointed out:
“China is currently not only imposing a ban on rare earths on certain elements, but it is also capable of imposing export controls on a wider range of rare earths, not all elements.
This represents a key advantage in China’s trade strategy, which was not fully utilized in 2018.
Global Alliance
The wide range of Trump tariffs, which also affect US allies, could falsely strengthen China’s position in this trade dispute and change future trade relations between China and Trump.
Marc Lantein observed:
“If Trump hadn’t put tariffs on the European Union, Japan, South Korea, for example, he could have linked resources to these countries and convinced them to put more pressure on China. I don’t think that will happen under the current circumstances.”
China is actively seeking international partners to counter US pressure during this trade war. A daily Chinese editorial declared that “global unity could win trade tyranny.”
As tension escalates, it appears that both sides are determined to stand on their ground. The full impact of this trade war in 2025 has yet to be seen, but it has already caused major market uncertainty.
China’s Ministry of Commerce vowed in a policy statement:
“If the US insists on further escalating economic and trade restrictions, China will have the company’s will and abundant means to take the necessary measures and will fight to the end.”
