China rallies citizens for trade war against U.S., rejects negotiations

China has mobilized to unite its people for an all-out trade war against the United States. The state media is emphasizing the irrationality of the U.S. mutual tariffs and the need for robust retaliation. Amid economic sluggishness, the conflict with the U.S. could lead to sacrifices from the public, potentially escalating social unrest. This effort to rally public opinion signals that China is unwilling to back down easily.

The People's Daily, the Chinese Communist Party's official newspaper, published an editorial titled "Focus on Your Own Work" on the front page of its July 7 edition, stating, "While the U.S. excessive tariffs will shock China, it will not be catastrophic." According to the mutual tariff plan announced by the U.S. on July 3 (local time), an additional 34% tariff will be imposed on imported goods from China. Adding this to the 20% imposed over the past two months means that tariffs have been raised to nearly 60% since the Trump administration began. In response, China imposed a 34% retaliatory tariff on all U.S. imports on July 4 while also initiating resource export controls and sanctions on corporations.

It emphasized that the ultimate victim of this tariff measure will be the United States. The media noted, "The share of exports to the U.S. in China's total exports fell from 19.2% in 2018 to 14.7% last year," adding that "the decline in exports to the U.S. will not have a shaking impact on the overall economy." On the contrary, it stated, "Since a significant portion of U.S. products rely on China, many consumer goods cannot be separated from China, and many investment and intermediate goods must also be imported from China," noting that "finding alternative suppliers in the international market in the short term will be very difficult."

It also emphasized that there is sufficient strength to withstand a tariff war. The media indicated, "During the first two months of this year, investments and consumption have grown better than expected, exports have overcome initial difficulties, and the Purchasing Managers' Index (PMI) for manufacturing and services has continuously rebounded, leading to an anticipated economic growth rate of over 5% in the first quarter." Based on this, it expressed a determination to mobilize policy tools. "We have been waging a trade war against the U.S. for eight years, and we have accumulated rich experience in that process," it noted, explaining that "according to future situations and needs, monetary policy tools such as lowering bank reserve requirements and interest rates have ample room for adjustment and can be introduced at any time, while fiscal policy still has room to increase expenditure intensity and accelerate progress."

The analysis indicates that China's swift and forceful retaliation against U.S. mutual tariffs signals an unwillingness to engage in negotiations easily. The Singapore Union News observed, "Compared to previous Chinese tariff responses to the U.S., the timing and intensity of this counterattack is the fastest and strongest since the trade war began in 2018," adding that "China is clearly prepared and is willing to fight fiercely with the U.S. in the economy and trade." It further stated, "This indicates a determination to separate supply chains and not allow the U.S. to act recklessly." The Hong Kong South China Morning Post (SCMP) also predicted, "China is likely to adopt a tough stance rather than negotiate with the U.S."

As the trade war between the two countries escalates, it is interpreted that the Chinese leadership is mobilizing state media to unite the public. From 2023, the year of the 'with COVID (lifting of lockdown policies),' China achieved a growth rate of over 5% for two consecutive years until last year, but the public's financial situation remains tight. The slump in real estate, which accounts for 70% of household assets in China, has a significant impact. If exports, which were the main growth driver last year, also decline, the entire economy could be shaken. Given that public suffering is inevitable until the conflict with the U.S. is resolved, it is essential to monitor public opinion proactively to prevent increased social unrest.

Various media, including the People's Daily, are also creating negative public sentiment regarding the U.S. mutual tariffs and strengthening China's response stance through reported articles. The state-run Xinhua News Agency stated, "China's response measures are reasonable and legal," adding that "China does not desire a trade war, but does not fear it." State-run China Central Television (CCTV) also reported the previous day that the Vietnamese garment industry, which heavily relied on the U.S., has suffered significantly due to the U.S. mutual tariffs, highlighting that "brands like Nike and Lululemon, which have production bases in Vietnam, will have no choice but to raise prices."

This kind of public relations effort seems to have had some effectiveness, at least online. In a commentary article in the People's Daily, comments stating that "China's business environment is improving and more investments are coming in" received nearly 1,000 likes. Most comments convey the sentiment: "In the face of U.S. pressure, we will unite even more and prove our resolve to the world." Signs of a boycott against American brands, which emphasize that price increases are unavoidable, are also emerging. One netizen commented, "We are not afraid; we have Li Ning and Anta," referring to domestically produced sportswear brands that are the biggest beneficiaries of the 'Guochao' (national tide) consumer trend.