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China threatens to unleash a tsunami on the world to retaliate against tariff humiliation

April 10, 2025 | | Print Article

China’s investments in factories have the potential to spur factory closings and layoffs worldwide, including here in the United States.

“The tsunami is coming for everyone,” Katherine Tai, who previously served as former President Joe Biden’s trade representative, warned the New York Times.

According to the Times, China has spent $1.9 trillion over the past four years building new factories and upgrading old factories with robots and automation.

“China is using more factory robots than the rest of the world combined, and most of them are made in China by Chinese companies,” the Times notes. “After several years of rapid growth, overall installations of new factory equipment have already jumped another 18 percent this year.”

The result is increasingly looking like a world where China dominates the goods market. Take, for instance, what’s happened within the car-manufacturing industry.

“For decades, the world’s largest car factory was Volkswagen’s complex in Wolfsburg, Germany,” according to the Times. “But BYD, the Chinese electric carmaker, is building two factories in China, each capable of producing twice as many cars as Wolfsburg.”

But the one thing holding China back has been trade restrictions like the tariffs just imposed by President Donald Trump. Tariffs that have reportedly enraged China’s leaders.

The United States “is using tariffs to subvert the existing international economic and trade order” so as “to serve the hegemonic interests of the United States,” a Chinese state TV anchor whined last Saturday.

China is fighting back, though not just by expanding its factory investments.

“A central thread running through its calculus is how to inflict hardship on companies that bank on their ties with the world’s second-largest economy,” according to the Wall Street Journal.

“Tools that Beijing has already used and is likely to expand include export controls of critical materials American companies use to make chips and defense-related products, regulatory investigations designed to intimidate and penalize U.S. companies, and blacklists intended to bar U.S. businesses from selling to China,” reporting continues.

Chinese officials are reportedly also devising new ways to intimidate American companies into handing over their intellectual property rights.

“China has systematically put together a new arsenal of tools that’s intended to minimize the cost to China and maximize the pain on the U.S.,” Evan Medeiros, a former senior national-security official in the Obama administration, told the Journal. “They’re prepared in a way that gives them an asymmetric advantage in the trade war.”

In a way, they’re already winning the war.

“Overall Chinese exports rose a whopping 13% in 2023 and 17% in 2024,” according to the New York Post. “Exports make up about 20% of the country’s GDP. Meanwhile, American exports — which were higher than ever ten years ago — are slumping. Exports only account for 11% of the US GDP — down from 13.6% in 2012.”

“US exports to China in particular fell almost 3% last year, to a total of $144 billion, according to the US Trade Representative’s office. The trade deficit also widened, hitting $295 billion,” the Post’s reporting continues.

The only good news for Americans is that the Chinese are now “less likely” to either devalue their currency, the yuan, or aggressively sell their holdings of U.S. Treasury bonds.

“Both moves could destabilize China’s own financial market and hurt its strategic goal of bolstering trade relations with other countries,” the Journal notes.

The United States isn’t alone in competing against China. Last year, the Brazilian government raised tariffs on Chinese metal and fiber optic exports. Meanwhile, the European Union raised tariffs on Chinese electric vehicles to protect its own auto industry.

Likewise, Mexico has proposed matching the United States’ tariffs on China, and Thailand has proposed adding a seven percent duty onto low-value goods imported from China.

Vivek Saxena
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