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The U.S.-China trade war is shifting from a tariff fight to a contest of leverage – and Beijing is quietly setting the tempo.
As President Donald Trump raises the volume, Beijing is adjusting the dials, fine-tuning export controls, critical minerals and supply chains.
The move leaves Washington reacting to Beijing’s playbook instead of writing the next move, a dynamic that will hang over Trump’s next encounter with Chinese President Xi Jinping.
On Thursday, the two leaders of the world’s largest economies are set to meet on the sidelines of the Asia-Pacific Economic Cooperation Summit in Busan, South Korea. It will be their first face-to-face meeting since Trump’s return to office.
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For Trump, the visit is more than diplomatic choreography, it’s a stage for his economic doctrine. He’s anchored his Washington comeback on the idea of U.S. economic firepower, framing his battle cry around restoring American dominance in global trade and emerging technologies. In doing so, his administration has pressed allies and rivals alike to revisit trade terms, wielding tariffs as both weapon and warning.
“There are a lot of arrows in the Chinese quiver,” Bryan Burack, a senior policy advisor for China and the Indo-Pacific at the Heritage Foundation, told Fox News Digital. “The fact of the matter is that they can literally make more moves than we can. They have more coercive tools to use against us, and they can deploy them easier,” Burack added, pointing to U.S. industrial dependencies.
“China has been decoupling from us for a long time,” Burack said. “So a lot of these moves that look like retaliation are really part of Xi Jinping’s long-standing effort to sever dependence on the United States and build self-reliance on critical technologies. Unfortunately, the only way for us to respond is to do the same and that process is painful and excruciating,” he added.
Clark Packard, a research fellow at the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute, said the perception that China now holds the upper hand is misplaced.
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“It is the most important bilateral relationship. It’s the most important geopolitical relationship,” Packard said. “But policymakers in the United States are overestimating China’s economic strength. Beijing believes global power is tilting its way, but that kind of defeatism in Washington is overdone. China’s economy isn’t nearly as strong as many people think.”
He pointed to deep imbalances within China’s economy as evidence. “It’s focused far too heavily on manufacturing and not enough on domestic consumption,” he said. “The country is increasingly dependent on exports and much of the world is growing uneasy with China’s outsized share of global trade,” Packard added.
Henrietta Levin, a senior fellow on China studies at the Center for Strategic and International Studies, a Washington, D.C.-based nonprofit, said Trump and Xi will likely try to cool tensions on Thursday, at least for now.
“Both sides are seeking a period of stability in the relationship,” said Levin, a former deputy China coordinator at the State Department. “They may reach a limited arrangement, but on whose terms remain to be seen. China is confident it has the upper hand in the trade war and the broader relationship, so Beijing will be reluctant to make meaningful concessions without getting much more in return.”
Levin said that confidence stems from Beijing’s belief that the U.S. can’t absorb economic pain as deeply or as patiently as China can, betting that any trade war will hurt Washington faster and harder.
“What would really strengthen the U.S. hand is deepening partnerships, especially in Asia. Creating a common front against Chinese aggression and unfair trade practices, rather than trying to confront China and its allies at the same time.”
Levin added that Washington must also regain control of the diplomatic narrative. “The U.S. would be better off setting the terms of the relationship rather than merely reacting,” she said. “It feels like we may have lost the plot in our diplomacy with China and have lost sight of the structural economic issues the trade war was originally meant to address.”
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