Whether President Xi Jinping of China agrees to bend to Mr. Trump’s demands remains an open question. With his latest move, Mr. Trump has escalated his trade threats to such a level that China can now no longer issue a proportional response. Last year, the United States exported only $130.4 billion of goods to China in total.
But trade experts say there are plenty of ways beyond tariffs that the Chinese government could retaliate — including slowing approvals for acquisitions made by American companies or stalling products at its ports. And Mr. Trump’s aggressive challenges may have left the Chinese president with little room to back down without looking weak to his own population.
“Mr. Trump seems to be counting on the fact that China will soon run out of room to retaliate with its own tariffs on U.S. exports,” said Eswar Prasad, a trade expert at Cornell University. “This could prove to be a miscalculation since China has other effective levers it can use in a trade war, including disruptions of American businesses’ sales operations and their supply chains that run through China.”
The White House imposed the tariffs as punishment for what the administration said was years of unfair trade practices by the Chinese government, including pressuring American companies to hand over valuable trade secrets in order to operate in that country.
Mr. Trump has been betting that the tariff threats will satisfy his supporters, who cheered his tough-on-China statements on the campaign trail. But China’s retaliation could come back to bite some groups, especially American farmers, who are bearing the brunt of China’s tariffs. And it is generating opposition within his own party among business-friendly Republicans who favor free trade and are increasingly concerned about Mr. Trump’s approach.
Lawmakers of both parties have criticized the president’s trade threats, but few have advocated taking direct action against him. Last week, Senate Republicans blocked a vote on legislation introduced by Senator Bob Corker, a Tennessee Republican, which would have given Congress the ability to overturn certain tariffs. Senate leaders said such a bill would have simply been vetoed by the president.
The trade conflict with China comes as the administration wages several trade conflicts at once. Rather than forming a coalition of countries to pressure China to change its trade practices, as some foreign leaders and trade officials have urged, the president has put allies on edge with tariffs on metal from Europe, Canada and Mexico and threats to withdraw from the North American Free Trade Agreement.