By Abhishek G Bhaya

The ongoing trade tensions between China and the United States have once again intensified, with sharp rhetoric and retaliatory tariffs marking the latest round of economic conflict. This has led analysts to speculate whether the two sides are engaged in political posturing or if the world has truly entered a full-scale trade war between the two largest economies.

“If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” the Chinese Embassy in the US said in a post on March 5 on X (formerly Twitter), quoting from the official statement, also posted on X, from Chinese Foreign Ministry a day earlier.

Some analysts see the latest Chinese statement—especially its explicit readiness for “any type of war” and the reference to “fighting till the end”—as unprecedented, marking Beijing’s most aggressive stance yet in the China-US trade war and signaling a strategic escalation. However, Chinese experts argue that despite the sharper rhetoric, Beijing’s official position remains unchanged.

Henry Huiyao Wang, a former Councillor of the State Council of China, dismisses the idea that Beijing’s recent response represents a dramatic shift. 

"No, I don't think this is anything different than what China previously said," he tells TRT World, noting that China’s counter-tariffs remain measured compared to the sweeping tariff hikes imposed by the United States.

"China has only applied tariffs on 80-100 product categories, whereas the US has raised tariffs across all categories. Therefore, I don't believe this is a tit-for-tat measure, but a reserved, mild and symbolic response by China,” says Wang, who is also the founder and president of the Beijing-based Center for China and Globalization (CCG).

The strong rhetoric is primarily aimed at the domestic audience rather than marking a fundamental change in Beijing’s trade war strategy, he says. 

But the Chinese leaders could also be using this posturing to test the waters. 

Rorry Daniels, Managing Director of the Asia Society Policy Institute, says that Beijing's stance is a calculated move to strengthen its negotiating position. 

"I think China has determined that there is no benefit in conceding its position before negotiations begin. Beijing has looked at President Trump’s priorities and decided to build some leverage for a tough negotiation," she tells TRT World from New York.

This, Daniels argues, explains the targeting of American agricultural products and the use of assertive language.

There are others who caution against reading too much into the Chinese statement. 

Julien Chaisse, a Law Professor at the City University of Hong Kong, agrees that the sharp rhetoric is notable but does not necessarily indicate a drastic departure from China’s previous stance.

"China has always framed trade disputes with the US as part of a broader effort to resist economic pressure. In my view, that has not changed," he tells TRT World, pointing out that while the phrase "fight to the end" might suggest a hard line, China’s actual responses have remained measured and dependent on Washington’s next moves.

Before this latest statement, arguably the strongest official remarks from China came on March 7, 2023, when then-Foreign Minister Qin Gang warned that US policy risked leading to “confrontation and conflict” if it persisted with its “all-round containment and suppression” of China, labeling it a “zero-sum game.”

Qin had cautioned, “If the United States does not hit the brake but continues to speed down the wrong path, no amount of guardrails can prevent derailing, and there will surely be conflict and confrontation.”

Is this a full-scale trade war?

China’s latest statement came after US President Donald Trump’s additional 10 percent tariffs on Chinese imports took effect on March 4, taking the cumulative tariffs imposed in just about a month to 20 percent.

In retaliation, Beijing announced new tariffs of up to 15 percent on key US goods, including chicken, pork, soy, and beef, along with export restrictions and expanded controls on business dealings with US companies. These measures are set to take effect on March 10.

As Washington imposed additional tariffs and Beijing responded with targeted countermeasures, some observers argue that the situation has escalated into a full-scale trade war. 

Daniels of Asia Society Policy Institute warns that "an escalatory tariff battle will set up a trade war in which the outcome will be determined by who blinks first."

She suggests that both sides are reluctant to appear weak, making public concessions unlikely. However, the economic toll of prolonged hostilities could eventually compel them to negotiate. “Neither side is likely to concede publicly but each will need to carefully manage the effects of a trade war inside their domestic political economy,” she reasons.

City University of Hong Kong’s Chaisse is more cautious in labeling the situation as a full-fledged trade war, arguing that China’s retaliatory tariffs remain selective rather than comprehensive. "Unlike previous rounds of tariffs, which were often paired with backchannel negotiations, this time, the geopolitical backdrop is much tenser,” he contends.

“Both governments have domestic political reasons to dig in, making compromise harder. That said, calling this a full-scale trade war would be premature," Chaisse argues.

CCG’s Wang concurs, pointing out that “China is already accustomed to this kind of tariff. Despite the 25 percent tariff on China, two-way trade between China and the US has gone up by 20 percent over the last four to five years.”

He argues that “these [retaliatory tariffs] are a way to push both sides to the negotiating table and reach a face-to-face agreement.”

America’s agriculture sector to face the brunt

The consequences of this trade dispute extend beyond geopolitics into economic realities, with US agriculture likely to be one of the hardest-hit sectors. Agricultural products are the largest US exports to China, with soybeans—now facing a 10 percent tariff—leading the list.

During the previous US-China trade war, similar tariffs prompted Chinese importers to shift soybean purchases to Brazil and Argentina. Analysts believe Beijing’s decision to target US agricultural exports with tariffs is designed to politically pressure Trump by impacting American farmers, a key Republican constituency.

As Daniels explains, "agriculture products are cyclical and built on expected markets that may now not materialise." With China imposing tariffs of up to 15 percent on key US agricultural products, American farmers are facing potential losses. 

Chaisse further underscores the vulnerability of American farmers. "China has long been a top buyer of US soy, pork, and beef, but it has alternatives like Brazil and Argentina, which are more than capable of stepping in. If this continues, American farmers will feel the strain," he notes.

Beyond agriculture, he warns that China could adopt more indirect measures against US businesses operating from the Asian country. 

“Beijing has plenty of ways to make life difficult for them like extra regulatory scrutiny, licensing slowdowns, restrictions on certain imports. If this trade fight escalates, expect more of those tactics.”

Fentanyl factor: A trade issue or bargaining chip?

President Trump has justified his latest tariff increases by linking them to efforts to curb the fentanyl crisis in the United States, a claim that China has dismissed as a "flimsy excuse." The matter remains a contentious point in US-China relations, with Washington insisting that Beijing must do more to curb fentanyl production and exports.

Wang downplays China’s role in the fentanyl crisis, arguing that Beijing has already taken steps to control the substance. 

"China is doing its best to contain and control and forbid this," he asserts, placing the blame on other sources of fentanyl entering the US. He points out that China’s State Council Information Office released a white paper as recently as March 4 outlining the “comprehensive measures” Beijing has taken to address the fentanyl issue.

Daniels takes a broader view, suggesting that trade, security, and political concerns have become increasingly entangled in US-China relations. "Fentanyl is a huge issue in US-China relations because its distribution in the US has been devastating to communities and families. But it’s no longer helpful to see issues divided into those that are specific to trade, politics, or security.”

Noting that neither Washington nor Beijing sees irritants in the relationship as discreet problems that can be managed independently, Daniels explains that all of these issues remain relevant to setting the mood for any type of coordination or deal. “So what’s important is not only the issues themselves but the attitudes each side brings to discussions of the issues.”

Chaisse sees Washington’s invocation of fentanyl as part of a larger strategic maneuver. "As for fentanyl, this issue has nothing to do with trade at its core. The US has been pressuring China for years to crack down on fentanyl production and exports, and Beijing insists it has already tightened controls. Linking this dispute to tariffs is a political move, not an economic one."

“It’s another sign that economic measures are being pulled into larger strategic battles rather than staying in their own lane,” he adds.

What lies ahead: A prolonged standoff or delicate negotiations?

Despite the strong rhetoric and retaliatory economic measures, Wang remains optimistic that negotiations could still offer a path forward.

“Trump is essentially a businessman and uses tariffs as a bargaining chip,” Wang emphasises, suggesting that his approach is less about confrontation and more about leveraging negotiations.

Chaisse, however, warns that the conditions for a swift resolution are becoming increasingly difficult. "Trump’s latest tariff hikes push things closer to what I would call a prolonged standoff. Unlike previous rounds of tariffs, which were often paired with backchannel negotiations, this time the geopolitical backdrop is much tense."

The US-China trade dispute is, therefore, at a crossroads. While the escalation in rhetoric suggests a tough stance from both sides, the actual policies and economic responses indicate a degree of strategic caution, according to analysts.

As Daniels puts it, "Neither side is likely to concede publicly, but each will need to carefully manage the effects of a trade war inside their domestic political economy."