Why China Isn’t Worried About Trump’s Trade War Threats | The Bottom Line

By Joel Wong

Victor Gao, a prominent Chinese analyst, offers a confident perspective on U.S.-China relations, arguing that the two nations are bound by deep economic interdependence and shared pragmatic interests. Despite rising tensions, Gao downplays the long-term impact of U.S. tariffs under Trump, emphasizing China’s economic resilience and the inevitability of its global ascension. He also proposes strategies for easing geopolitical conflicts, such as leveraging Taiwan’s role in the semiconductor supply chain and fostering diplomatic cooperation. However, skeptics question Gao’s optimism, citing challenges like slowing GDP growth, demographic shifts, and increasing U.S.-China rivalry.

Key Points from Gao’s Argument

1. Tariffs and Economic Interdependence

Gao asserts that U.S. tariffs would harm American consumers more than China, as increased import costs would translate to higher prices for goods. He highlights the mutual reliance between the two nations, particularly in trade, investment, and critical supply chains like semiconductors. Gao argues that severe economic decoupling would be detrimental to both countries, making full disengagement unlikely.

2. China’s Economic Resilience

China’s strong economic fundamentals, long-term growth trajectory, and increasing global influence underpin Gao’s confidence. He points to projections that China’s economy will eventually surpass that of the U.S., reinforcing its role as a dominant global power. This resilience, he believes, positions China to withstand short-term challenges like tariffs or external shocks.

3. U.S. Pragmatism in Policy

Gao predicts that U.S. policymakers will prioritize practical concerns over ideological disputes. For instance, securing access to Taiwan’s semiconductor industry, critical for global technology supply chains, may lead the U.S. to moderate its stance on Taiwan. Gao even suggests transforming Taiwan into a free trade zone as a way to address supply chain dependencies and stabilize relations with China.

4. China’s Role in Global Diplomacy

China’s growing influence in international diplomacy further supports Gao’s optimistic outlook. He highlights examples such as China mediating Saudi-Iran relations to demonstrate its constructive role on the global stage. Gao envisions a future where the U.S. acknowledges China’s contributions to global stability and engages more cooperatively.

5. Taiwan as a Middle Ground

Gao proposes a pragmatic approach to Taiwan, framing it as a potential bridge for cooperation rather than a flashpoint for conflict. By preserving Taiwan’s autonomy while avoiding contentious sovereignty debates, he suggests that both nations can focus on economic and strategic collaboration instead of confrontation.

6. Long-Term Perspective

Gao views short-term conflicts, like tariffs or political disputes, as less significant in the broader context of U.S.-China relations. He emphasizes shared challenges, such as climate change and global health crises, as opportunities for collaboration that will ultimately outweigh divisive issues.

Challenges to Gao’s Optimism

While Gao’s arguments are compelling, skeptics highlight significant obstacles to his vision of cooperation:

Slowing Economic Growth: China’s GDP growth has decelerated, and demographic issues, such as an aging population, pose long-term challenges to its economic dominance.

Geopolitical Tensions: Issues like Taiwan, human rights concerns, and China’s closer ties with Russia complicate U.S.-China relations and undermine trust.

Rising Rivalry: The U.S. increasingly views China as a strategic competitor, leading to bipartisan support for policies aimed at countering Chinese influence.

Conclusion

Victor Gao’s optimistic outlook on U.S.-China relations stems from his belief in mutual economic interdependence, China’s resilience, and the potential for diplomatic flexibility. He envisions a cooperative future driven by pragmatic interests and shared global challenges. However, the realities of slowing economic growth, geopolitical tensions, and rising rivalry suggest that Gao’s predictions may face significant hurdles. Whether the two nations can navigate these complexities will determine the trajectory of their relationship and the broader global order.