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Roula Khalaf, editor -in -chief of the FT, selects her favorite stories in this weekly newsletter.
The writer is a member of the faculty of Yale, former president of Morgan Stanley Asia, and author of “ accidental conflict: America, China and the shock of false stories ''
Trade wars are political wars. The goal of the amazing 145% price of Donald Trump on China is not a revival of the American economy of yesteryear but to bring Xi Jinping, his Chinese counterpart, at the Table for the Fanfaron of another Trumpian agreement. It will not happen. XI, despite his unat -contested single party elections, has a political equation that will not allow him to comply.
The XI political contract was sealed with a solemn commitment made to the Chinese people in November 2012, shortly after being appointed secretary general of the Chinese Communist Party. On the steps of the National Museum of China, he married what has become the Chinese dream: “realizing the great renewal of the Chinese nation is the biggest dream of the Chinese nation in modern history.”
Supervised around twin commitments in matters of prosperity and rejuvenation, the Chinese dream is no less a political anchor for modern China than Mag for Trump. It was not an accident that this message was orchestrated to strengthen a museum exhibition which included an extraordinary rise in China after a “century of humiliation”. The XI Declaration spoke of a national renewal from which there can be no turning back. The political calculation of modern China stems from this promise.
Even if we, in the West, do not agree with the principles and tactics of Chinese renewal, we must take the engagement of XI to this dream seriously. If anything, it has deepened over the years, stimulating a nationalist fervor which has important implications for the role of China in the world as a whole.
In 2021On the occasion of the 100th anniversary of the Chinese Communist Party Foundation, Xi Jinping essentially operational this political contract, warning that “we will never allow any foreign force to intimidate it, oppress ourselves or subjugate us.”
It is in this context that we have to interpret the last promise of China to “fight until the end” in response to Trump's prices. The sequencing of actions is important here. Trump struck first, even if American secretary of the Treasury Scott Bessent tried to reverse the steam, saying: “It was a big mistake, this Chinese escalation”. For China, Trump's pricing attack is well in the construction “Bully, oppressive and subjugation” which XI warned.
In the end, however, it is not a question of knowing who is right or bad, or even who landed the first punch. The conflict follows from a collision trajectory between two very different political mentalities.
In China, a few weeks ago, I met a transversal cup of civil servants, academics and business people. Their opinions lasted the whole range, from Hardliners to parties to modern thinkers focused on the market. But regardless of where they sit on the political spectrum of China, there was no doubt about their collective conviction. As one of my most liberal friends said, “China will certainly retaliate to another Trump tariff attack.” This is exactly what happened.
This argument can be pushed further. The United States has a president who acts out of anger and intimidation. China has a president who operates with a strategic discipline. Unlike Trump, Xi does not need to occur and personalize his statements. The last price response from China was buried on the website of its Ministry of Finance.
This trade war oppose emotional policy crises against a more impartial calculation. While Trump continues to put pressure on China, China quickly retaliated in kind. Beijing has suggested that China's next decision will not be another tariff action. As the third largest export market in the United States, the second largest foreign holder in treasury titles, having a strangulation on strategically vital land and a monetary weapon, China has many more options in its arsenal. It is a downward race that no one can win.
