China's trade war perspective

Summary

Podcast Summary: The Indicator from Planet Money – "China's Trade War Perspective"

Episode Overview Title: China's Trade War Perspective
Host/Author: NPR
Release Date: April 22, 2025
Description: This episode delves into the ongoing economic standoff between the United States and China, exploring its impacts from the Chinese viewpoint. NPR correspondents Emily Feng and John Ruich provide in-depth analysis and insights into the motivations, reactions, and potential future of this high-stakes trade war.

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1. Introduction to the US-China Trade War

The episode opens with a recap of the escalating trade tensions between the world's two largest economies. NPR hosts Emily Feng and John Ruich set the stage by outlining the sequence of tariff impositions initiated by the United States under President Donald Trump and China's subsequent retaliations.

Emily Feng [00:12]: "The president will be implementing tomorrow a 10% tariff on China. Then China hit back with retaliatory tariffs."

2. Escalation of Tariffs

The discussion highlights the tit-for-tat nature of the tariffs, detailing the specific rates imposed by both nations. As of the episode's release, the United States has levied a 145% tariff on Chinese goods, while China retaliates with a 125% tariff on US goods.

Emily Feng [00:55]: "Beijing announced it will impose 84% tariffs. As it stands, the US has a 145% tariff on Chinese goods and China has a 125% tariff on US goods."

3. Impact on Chinese Manufacturing and Businesses

The correspondents explore the ramifications of the trade war on Chinese businesses, particularly those reliant on exports to the US. Visiting Guangzhou during the Canton Fair, Emily Feng reports firsthand accounts of uncertainty and halted production.

Adrian Ma [02:39]: "Everyone is holding their breath at this point... Production, therefore, has gone, been paused."

The anxiety among manufacturers stems from the unpredictability of future tariffs, making it challenging to plan and make informed business decisions.

4. Chinese Leadership's Perspective and Strategy

John Ruich provides insights into how Chinese leaders, including President Xi Jinping, perceive and navigate the trade tensions. Despite economic slowdowns and a real estate crisis, China's leadership appears strategically prepared for prolonged economic adjustments.

John Ruich [06:30]: "Xi Jinping has been warning for years that there are, quote, rough seas ahead and that he's kind of intentionally willing to take a slower economy..."

This strategic patience indicates China's focus on long-term structural changes rather than short-term economic gains.

5. Public Sentiment and Propaganda

The episode touches on the narrative within China regarding the trade war. Chinese media and factory communications aim to portray resilience and downplay the negative impacts, emphasizing China's efficiency and critical role in global supply chains.

John Ruich [04:27]: "Chinese factories... are telling American consumers... we're the ones making your stuff."

This messaging serves to bolster domestic confidence and counteract external pressures.

6. Comparative Impact: US vs. China

Emily Feng contrasts the reactions in the US and China, noting widespread consumer anxiety in the United States, including stock market volatility and fears of an impending recession. In China, while businesses are nervous, the overall sentiment is more measured, with a belief in the system's resilience.

Adrian Ma [03:26]: "It's impossible to make business decisions if you have no idea what's coming."

7. Long-Term Economic Implications

Both correspondents discuss the potential long-term effects of the trade war. China's deliberate move to shift its economy from manufacturing and exports to consumer-driven growth is accelerating under the pressure of tariffs.

John Ruich [07:28]: "A trade war is kind of just accelerating all of these structural economic changes they're trying to force through."

8. Potential Outcomes and Future Directions

Looking ahead, the hosts speculate on which side might de-escalate the trade tensions first. They suggest that the United States, driven by a more dramatic and reactive approach under President Trump, may initiate the next move to alleviate tensions.

John Ruich [08:31]: "I would expect Trump to make the first move."

9. Conclusion

The episode wraps up by emphasizing the enduring nature of the trade conflict and its broader implications for global economics and geopolitical dynamics. The correspondents underscore the complexity of negotiations and the strategic patience exhibited by Chinese leadership.

Emily Feng [09:07]: "How is President Xi Jinping looking at this?"

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Notable Quotes with Timestamps:

• Emily Feng [00:12]: "The president will be implementing tomorrow a 10% tariff on China."
• Adrian Ma [02:39]: "Everyone is holding their breath at this point... Production... has been paused."
• John Ruich [04:27]: "Chinese factories... are telling American consumers... we're the ones making your stuff."
• Adrian Ma [03:26]: "It's impossible to make business decisions if you have no idea what's coming."
• John Ruich [06:30]: "Xi Jinping has been warning for years that there are, quote, rough seas ahead..."
• John Ruich [07:28]: "A trade war is kind of just accelerating all of these structural economic changes..."
• John Ruich [08:31]: "I would expect Trump to make the first move."

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Production Credits:
This episode was produced by Julia Richie and Cooper Katz McKim, engineered by Robert Rodriguez, fact-checked by Sierra Juarez, and edited by Cake and Cannon at NPR's Indicators production team.

Transcript

[Adrian Ma]

Npr.

[Emily Feng]

This is the indicator from Planet Money. I'm Adrian Ma. As we're all probably aware by now, the world's two largest economies are locked in a high stakes economic standoff. Let's recap. It started in early February. The president will be implementing tomorrow a 10% tariff on China. Then China hit back with retaliatory tariffs. China says it will counter US President Donald Trump's tariffs with its own import fees a couple months later. So we're going to be charging a discounted reciprocal tariff of 34%, I think. To which China responded saying that it will impose additional tariffs on U.S. goods.

[John Ruich]

From April 10 at a rate of 34%.

[Emily Feng]

And around and around. It's gone.

[John Ruich]

The United States will impose additional tariffs on China of 50%.

[Emily Feng]

Beijing. Beijing announced it will impose 84% tariffs. As it stands, the US has a 145% tariff on Chinese goods and China has a 125% tariff on US goods. And just yesterday, China threatened to retaliate against other countries if they cut a trade deal with the U.S. that hurts China. Now, we've heard a lot about how this trade war has been affecting US Businesses and US Consumers. But how is this trade war being felt in China? And what is the end game for Chinese President Xi Jinping? Today on the show, NPR correspondents Emily Feng and John Ruich bring us some answers. They bring us a view of this trade war from China. NPR correspondent Emily Feng. Hello.

[John Ruich]

Hey, Adrian.

[Emily Feng]

NPR correspondent John Ruich.

[Adrian Ma]

Yo, Adrian, how's it going?

[Emily Feng]

It is good. And thank you for joining us at what is sort of an unusual time. Uh, I'm speaking at about 9:00 in the evening in Washington, D.C. which is where you are, Emily. Yes, but John is in China right now.

[John Ruich]

He is literally on the other side of the world.

[Emily Feng]

That's right. And this is perfect. I mean, you're both here because you are NPR's resident China experts. So let's get into it, starting off with a little bit of compare and contrast. So since Trump began rolling out tariffs, there's been quite a bit of freaking out in the US I think. I think it's fair to say. Right. The stock market has been going haywire. Consumers have been panic buying stuff, and to top it all off, some economists are even concerned about a possible recession. So I'm curious about what is the reaction you're seeing over there.

[Adrian Ma]

Yeah, yesterday I came down to Guangzhou, this town in the south, to attend the Canton fair, which is this gigantic, it's the longest running trade Fair in the country. It's been going since the late 50s. And I would say the people we talk to on the manufacturing side are sort of. Everyone is holding their breath at this point. An example is this guy we met named Gavin Yang. He works for a company called nux. They supply air conditioners to the US And Latin America. And he just said, up and down the supply chain, everybody's nervous and everything is ground to a halt. They are not shipping to the United States. Production, therefore, has gone, been paused. If nobody just knows what tomorrow is going to bring, I think that's a big part of it. It's impossible to make business decisions if you have no idea what's coming.

[Emily Feng]

So this is sort of like the mirror image of what we've been hearing from all these business owners in the US that they're dealing with all this uncertainty.

[Adrian Ma]

Absolutely. So the disruption is massive.

[Emily Feng]

And, Emily, what about you? What have you been seeing from your reporting?

[John Ruich]

So I'm sitting here in Washington, D.C. where the tariffs originated, and I've been watching, you know, regardless of what Chinese exporters feel, how, how Chinese leaders want the rest of the world to think they're feeling, which is a combination of things. It's a mixture of defiance. You know, you have leaders like Xi Jinping, the head of the Communist Party, saying, you know, the road's not gonna be smooth, but we're going to continue onwards. On TikTok, I've been noticing this week there have been more and more Chinese factories that have been putting out videos in English telling American consumers, basically saying, you might never have thought about where your supply chains are, but they're here in China and we're the ones making your stuff.

[Emily Feng]

Okay? So when it comes to justifying the trade war with China, one story Trump has repeated a lot is that the US has been getting ripped off by China for years. When it comes to the Chinese side of this trade relationship, what's the story they tell themselves?

[John Ruich]

So it is undeniable that there have been unfair trade practices that China has perpetuated and they have dumped goods and they have stolen IP and, you know, all that stuff. But I think a lot of Chinese, if you ask them about the export market, they'll say, we did this stuff so you didn't have to. And they are skeptical and incredulous when you ask them, well, do you think Americans would want to assemble iPhones or glue rubber soles onto shoes? I think that China feels like it has done manufacturing much more efficiently than any other country, more efficiently than Southeast Asia, certainly. Can do right now and at costs much lower than the US and that it's dirty hard work that they don't believe Americans would do even if they could do it at the same cost that China does.

[Adrian Ma]

Yeah. There's also the bigger question about China's understanding of what Trump wants. Right. And by the way, 20% of these tariffs are, are supposedly related to fentanyl, which has nothing to do with trade. Right. Beijing has this long standing paranoia, or maybe it's not paranoia about the Trump administration or about the US Government in general just trying to hold China down. They can't deal with the fact that China is going to, at some point, potentially be the biggest economy in the world. It's got a strong military, it's a peer competitor.

[Emily Feng]

But China's economy has struggled a bit in the past few years. Right. I mean, they've had slower growth and a real estate crisis to deal with. So do you think this kind of affects its negotiating position with the U.S. like, the economy here has been pretty strong according to the indicators at least, you know, before the tariffs really started rocking things.

[John Ruich]

I would be careful making the argument that because China's economy was kind of limping along before these tariffs, that they're then in a weaker negotiating position because a lot of the policies that created this plateauing economy were intentional and they're strategic. And Xi Jinping has been warning for years that there are, quote, rough seas ahead and that he's kind of intentionally willing to take a slower economy because even before the tariffs, he was trying to structurally change China's economy away from things like relying on building houses all the time or exporting cheap goods to the US or creating an economy that was reliant on consumerism. And so I think what China's leaders have been telegraphing is they were kind of prepared for long term economic pain even before another trade war with the US and so a trade war is kind of just accelerating all of these structural economic changes they're trying to force through.

[Emily Feng]

Speaking of long term economic pain, I mean, this is what both countries could be facing if a protracted trade war goes on. And yet neither side seems to be rushing to the bargaining table right now. How is President Xi Jinping looking at this?

[John Ruich]

Basically, I think if I were China, I would say I don't really have to do anything. I kind of can let the US Put out, be this chaos agent and just present myself as a more stable, more calm world leader in comparison to.

[Emily Feng]

The U.S. anybody place any bets on who's going to make the first call.

[Adrian Ma]

It wouldn't surprise me if in the halls of power in Beijing, there was a lot of confidence that the Chinese system and the Chinese people can endure more pain, economic pain, than Americans can, than Donald Trump can, because he ran on this platform of bringing inflation down on day one. And if you cut off all products from China, one guaranteed outcome is that prices of stuff is going to go up.

[John Ruich]

Yeah, I think the first move is probably going to come from the US and it's mostly because the two countries have completely different political languages. China is all about the details, about sending little symbolic gestures that then they they trust the other side to know how to interpret, whereas the White House right now is about making these big dramatic moves to pressure the other side to corner them into a weaker negotiating stance. So simply because I think the White House has been much more melodramatic, I would expect Trump to make the first move.

[Emily Feng]

NPR's John Ruich and Emily Fang, thank you so much for taking time this night slash morning to break down China with us.

[John Ruich]

Thanks for having us, Adrian. Fun to cross time zones with you, John.

[Adrian Ma]

Likewise. Likewise.

[Emily Feng]

This episode was produced by Julia Richie and Cooper Katz McKim with engineering by Robert Rodriguez. It was fact checked by Sierra Juarez. Cake and Cannon edits the show and the indicators of production of NPR.