Trump tests China’s nerves with tariff threats, but Beijing bets truce will hold
BUSAN, SOUTH KOREA – OCTOBER 30: U.S. President Donald Trump and Chinese President Xi Jinping walk into a room for a bilateral meeting at Gimhae Air Base in Busan, South Korea, on October 30, 2025.
Andrew Harnik | Getty Images News | Getty Images
US President Donald Trump has expanded his tariff playbook, unveiling a series of warnings and policy moves that impact Beijing’s interests without directly increasing tariffs on Chinese goods.
But analysts are hopeful that recent geopolitical turmoil is unlikely to unravel the fragile US-China trade truce, as Beijing is betting that Trump’s threats will not be implemented to cause meaningful harm to China. Both sides are trying to keep their plans for the leaders’ meeting in April on track.
“Beijing is watching” but will likely respond cautiously to Trump’s latest tariff threats, said Deborah Elms, head of trade policy at the Hinrich Foundation. He said it was unlikely Trump would follow through on threats such as a 100 per cent tariff on Canada or other warnings he has made to trading partners.
“There is no reason to provoke another reaction from Washington right now.” [as] “Both the United States and China are trying to preserve the fragile ceasefire through Trump’s planned visit to China in April,” Elms said. he added.
Gabriel Wildau, managing director of consultancy firm Teneo, said Chinese leaders may be skeptical that Trump will follow through on his latest tariff threats, given that he largely backed away from previous measures following backlash from financial markets and business.
Trump’s expanding playbook
Last month, the Trump administration Venezuela, a crucial source of crude oil for China, has seized control of oil flows and threatened 25% tariffs on countries doing business with Iran; This could hit Beijing as Tehran’s biggest oil customer.
Trump has also threatened to take over Greenland, sparking concerns in Beijing, which is trying to develop Arctic shipping routes and has expressed interest in the island’s rare earth resources. The American president later backed away from threats of force and tariffs but said there was “a framework for a future agreement.”
Canada emerged as the final flashpoint. Trump warned he would impose 100% tariffs on Canadian goods if Ottawa reaches a trade deal with China; This was in stark contrast to his previous comments that such a deal could be “a good thing”.
“‘Never interrupt your enemy when he’s making a mistake’ seems to be the guiding principle [for China]”
Gabriel Wildau
Teneo General Manager
Prime Minister Mark Carney reached a trade agreement with China, Canada’s second largest trading partner after the United States, following his visit to Beijing earlier this month. Under the agreement, Ottawa will roll back 100% tariffs on Chinese electric vehicles, while Beijing will lift retaliatory duties on Canadian canola seeds and meal.
Trump’s tone regarding the Canada-China deal changed after Carney’s speech in Davos, in which he called on middle-power countries to unite against the coercive tactics of major powers. Carney later said Canada had no plans to sign a free trade agreement with Beijing, stating that the scope of the latest agreement was limited.
As officials prepare to renegotiate the U.S.-Canada-Mexico free trade agreement, Trump appears to have made it clear that “if you go too far in the China direction, we’re going to get really tough on you,” said Kurt Tong, chief executive of The Asia Group.
Beijing said the trade deal with Canada was “not directed at any third party” and was in line with the common interests of the two countries.
David Meale, president of Eurasia Group’s China operation, said Chinese leaders would welcome the opening created by Carney’s accession and the trade deal, but he could see limits to how far Canada could stray from its deep ties with Washington.
Beijing’s calculations
Chinese officials are trying to envision stability in relations with Washington in the face of rising tensions in recent weeks.
Dong Yan, Deputy Minister of Commerce of China. he said at the press conference In a statement made on Monday, it was stated that the two sides have maintained regular communication since Trump and Chinese President Xi Jinping met in South Korea in October.
Yan stated that China is willing to work with the United States to manage differences and deepen cooperation to ensure a stable and healthy bilateral relationship, emphasizing that the relationship should be based on mutual respect and win-win cooperation.
Stephen Olson, a visiting senior fellow at the ISEAS-Yusof Ishak Institute, said both sides “seem to have adapted to a world where the two leaders are throwing grenades at each other — or at least threatening — without disrupting their plans to meet.”
The official added that it would be in the interest of both parties for the April meeting to go on track.
China’s measured response reflects efforts to strengthen its position vis-à-vis the United States while reassuring global leaders that its ties with Washington remain stable as Beijing hosts a new round of foreign leaders.
Many world leaders visited China this year, including Irish Prime Minister Michael Martin and South Korean President Lee Jae Myung. Xi met with Finnish Prime Minister Petteri Orpo on Tuesday; British Prime Minister Keir Starmer met on Tuesday. He is expected to visit China This week marked the first visit by a British leader in eight years.
Separately, Xi called for deeper cooperation in a phone call with Indian President Droupadi Murmu on Monday, saying Beijing and New Delhi were “good neighbours, friends and partners”.
Wildau said there was little sign that Beijing was planning concrete policy responses such as sanctions, trade restrictions or military deployments to counter Trump’s recent broad direction.
“Beijing’s overarching strategy appears to maximize global distrust of the United States with comments highlighting perceived U.S. bullying, while presenting China in contrasting terms promoting restraint, multilateralism, free trade and win-win cooperation,” Wildau said. He added that China could do this without directly harming the ongoing détente with the United States.
“‘Never interrupt your enemy when he’s making a mistake’ seems to be the guiding principle [for China,]” he noted.
