How the American prices challenge China

The decision of President Trump on Saturday to impose new prices on imports from China poses a dilemma for the leaders of Beijing: is it better to ignore the new prices or to retaliate?

Little flows the risk of appearing weak in the eyes of the Chinese people. The vast inner propaganda apparatus of China has described China as an increasing power, while the United States is described as suffering from inexorable decline.

But the risks of vigorous reprisal triggering a world trade war that could damage China more than the United States. The China’s trade surplus – the amount by which its exports exceeded imports – reached nearly 1 dollars Billion last year. Exports and construction of new factories to make new exports are practically the only area of ​​force these days in the Chinese economy.

On Sunday, the initial reaction of China was cautious: the Ministry of Commerce said it would dispute the prices of the World Trade Organization. The investigation panels of this organization can try to embarrass a country that violates international free trade rules, by criticizing a specific commercial action.

But the WTO has lost a large part of its power since 2019. The first Trump administration, then the Biden administration blocked the appointment of the judges necessary to authorize countries to take countermeasures.

Some in China had been relieved that Trump initially concentrated his criticism on other countries. But few expected it to last.