There's no long term view, China has quite a few things they can use to pressure the US and it will be stupid for them not to use those.

It's a self-harming game and the first one to bend will lose it. The longer US tarifs stays, the more some US companies that depends on those imports will be in trouble. China has plenty of cards to go the same route, controlling a huge part of the western companies production system. It feels to me that this is just a first card, and there's some more damaging ones to both China and the US to come.

And to be honest, with the current US behaviour, between this and Iran, the only thing it achieve is that most of the world will want to be as independant as possible of the dollar in the future

It wants China to give the same market access as it enjoys in other countries in the world, including regulating and treating foreig companies as its own companies are treated. Also, IP theft.

It also seems that in contrast to what you say, other countries are setting up to move away from China, to Vietnam, say.

I wonder what recourse the CCP really has.

As living standards in China rise, cost of manufacture in China was bound to rise. The Chinese have been preparing for this for quite some time. They have started automation and have begun an ambitious plan of infrastructure lead development called BRI and countries like Italy has signed up to join the project.

> I wonder what recourse the CCP really has.

I would assume plenty. China can slowly start dumping US treasuries and stop buying more. China can sanction US companies like Apple operating in China. China can start bilateral trade agreements with other countries and use it's financial clout to demand de-dollarization and move international trade to a more neutral currency like the IMF SDR. China can buy more oil from Iran. China can invade Taiwan. China can refuse to honor sanctions against North Korea etc

> They have started automation and have begun an ambitious plan of infrastructure lead development called BRI and countries like Italy has signed up to join the project.

Well the move away from China is not because of costs, but because of politics. Especially companies here (EU) are very worried about the IP theft and protectionist actions. Except if you are Mercedes or BMW, China is likely to copy your product and then push you out of the domestic market through government regulation, at least that's what I hear. Italy is special. On the one hand, its domestic politics. On the other hand, how meaningful can such an agreement truly be with an EU country?

> China can slowly start dumping US treasuries and stop buying more.

They already do that. But since this strengthens the yuan, isn't there a limit? So far, it did not seem to affect the US very much.

> China can sanction US companies like Apple operating in China.

While China is becoming an important market, it is a luxury market segment so I think Apple would survive. On the other hand, this would probably see all other companies leaving China very rapidly. I think this is the most realistic outcome, but I'd see China losing in the long run.

> China can start bilateral trade agreements with other countries and use it's financial clout to demand de-dollarization and move international trade to a more neutral currency like the IMF SDR.

What effect should that have except decrease Chinese exports and an increase in US exports? The EU does not do real aka meaningful trade agreements bilaterally. Anglo-Saxon countries would neither. For all other countries, China has been trying to expand its influence since the last five years, at least. They have had success in Africa, but have gotten a bad reputation from it.

> China can invade Taiwan.

I don't see that happening. If Japan, Korea and the US would defend Taiwain's sovereignity, that war would be over very quickly. And with Trump, would you really want to gamble?

> China can refuse to honor sanctions against North Korea

That is true and we have seen Trump trying to fix the NK situation for that reason. However, I feel like the impact would be rather small. I think we have seen that Kim does not really want nuclear weapons just because. If Trump would have lifted sanctions, he'd probably get rid of them.

I guess I shold have asked whether there is any recourse which would damage the US more than China.

No country or bloc has a truly free market. Even the EU has rules preferring and protecting indigenous companies. Criticising China alone is just hypocrisy.

Quite stupidly the US picked a trade battle with Canada and the UK/EU before going after China. Trump's administration had the termidity to call Canada a security threat while the air defence of the US mainland's second in command is a Canadian General.

Now that it makes people unhappy in the US, I get it, it's a different mindset. But as much as the US has the right to disagree with China's policies and vision, China has every right to disagree with the US one. The US government as every right to try to protect its market but China has every right to fight back.

What exactly does that mean?

This is a cliche problem with these "great power" games. On one hand, neither side can publicly "bend." OTOH, public statements and/or implications that "we'll make them bend" are politically popular.^

Concessions are only possible when the volume of disputes are muted. Once they become national pride issues, or leaders put their own image on the line.... At that point, it's no longer about commodities or tariffs or whatnot. It's about winning.

^China is not a democracy, but that does not mean they don't have politics or that public perception is less important.

U.S. propaganda is the mostly the opposite of this. We’re supposed to be an invincible freedom juggernaut who the whole world loves, including the poor, oppressed people of Iran/North Korea who generally love America [actually true in Iran, from what Persian friends tell me] and just want some drone-delivered democracy.

The reality is of course somewhat different.

Which not inaccurate.

It's a local (to me) example of China undercutting an industry in order to destroy it and replace it. This is how they achieved dominance in some of the "rare earth" material trading industries.

This administration had gone great length to convince China what it wants is not just trade, it wants a surrender from China to address its own confidence crisis with itself. And of course, the bill will be 100% on China.

So it is not a game with economical gain any more, it is the game of great powers, and China needs to have its own Trump card and demonstrate the willingness to deploy it. It doesn't suit their best interests, but as comparing to lose the 'war', it is better to try it than not. Because who knows?

If the current global order isn't something that is maintainable, what is clear to me, China/US won't be the worst off if it no longer exists, because they are so big, the new order or orders will have them play the critical part of it anyway, so they are not afraid to burn it to ground themselves.

> confidence crisis with itself

What makes you think this?

> then escalated

The trade war had already started years before it was declared. China has been strategically taking down Western industries and forcing dependence on them. It was only a matter of time something like this would happen.

> what do you expect China to respond?

Either way this will end the same way, both Countries will have to come to some agreement. The only choice is when. China has had an advantage for quite some time and has gotten away with quite a lot (economic trading status, debt traps, stealing of IP, etc), if they struck a fair deal with the US I'm sure they would write it all off.