China Can't Afford a Trade War...and Trump Knows It
While the usual suspects wring their hands, the truth is that a trade war could crash China. Trump's timing couldn't be worse for Beijing.
by Rod D. Martin
February 12, 2025
Beijing just rang in the Chinese New Year, but it doesn’t have a lot to celebrate. While the usual suspects in America warn of the “apocalyptic” consequences to Americans of Trump’s new tariffs, in reality, it’s China that’s teetering on the brink.
Trump’s timing is brutal. China’s economy is already straining under the weight of weak consumer demand, a collapsing real estate sector (into which nearly all the public’s savings has gone, and on which their aging population is depending for retirement income), not to mention ballooning local government debt with no obvious means to repay. This will only get worse as China’s working age population quickly ages out, leaving fewer and fewer people to support more and more retirees.
My friend Yi Fuxian, the senior scientist at the University of Wisconsin-Madison who spearheaded the movement against the One Child Policy, estimates that China’s actual population is right at 120 million lower than the government’s…