The U.S. is stunned and confused by China’s powerful and sophisticated response to the Trump regime’s clumsy tariff war.
As the U.S. hikes tariffs to 245% and demands talks, Beijing reduces the yuan to its lowest level since 2023, launches a full boycott of Boeing, and redirects its trade to Europe and Southeast Asia with long term trade deals, weaponizing its $273 billion trade surplus to bypass the U.S. dollar entirely.
China’s dramatic RMB pivot is flipping the trade war, sidelining U.S. leverage, and guiding the world away from a focus on the faultering Washington empire.
President Xi Jinping’s active courtship of the Global South underscores Beijing’s strategy to deepen ties with developing nations that find themselves squeezed by Western protectionism.
Xi’s recent visits to Vietnam, Malaysia, and Cambodia—countries directly impacted by Trump’s tariffs—highlight Beijing’s bid to integrate these economies into its sphere of influence through partnerships in 5G, AI, green energy, and advanced manufacturing.
A decoupling between the world’s two largest capital markets could cost US$2.5 trillion in an extreme scenario, as investors from the U.S. and China are forced to divest their holdings of equities and debt instruments, according to an analysis by Goldman Sachs.
It is rumoured that the Trump regime could force U.S. investors to sell nearly US$800 billion of Chinese stocks trading on US exchanges in case of a decoupling, Goldman Sachs analysts said in a report last week.
On the flip side, China could liquidate its U.S. Treasury and equity holdings amounting to US$1.3 trillion and US$370 billion, respectively, and trigger further sell-off by other major holders of U.S. Treasury debt particularly Japan and the European Union.
This is no longer about tactical tariff battles or headline-driven skirmishes, says the Asia Times. It’s about a bifurcation of the global financial and economic order—a structural realignment that will touch every dimension of trade, capital allocation, foreign exchange, and ESG frameworks. The old unipolar empire headed by the U.S. as an “irreversible” force is being dismantled before our eyes.
Sources:
- Asia Times, April 15, 2025. https://asiatimes.com/…/the-coming-us-china-financial…/
- South China Morning Post, Apr 14, 2025. https://www.scmp.com/…/us-china-decoupling-could-cost…
- Andrey Vondemark, Apr 19, 2025. Video: https://youtu.be/LDFiMe3mR4A?t=310
China Environment News 