Chinese President Xi Jinping issued clear instructions to his top officials after US President Donald Trump unveiled a comprehensive plan to decouple the world’s largest economies: “Maintain calm and continue on course.”
In a statement released on Wednesday, in reference to the trade war, the Chinese leader called on Communist Party functionaries to react to global challenges with “composure.” Just a few days earlier, the US had published its “America First” investment policy, which suggests that Trump’s plans go far beyond tariffs.
US President Donald Trump’s new decree closes off several entry points for Chinese investments in the United States. Digital technologies, dual-use goods, natural resources and critical infrastructure in the US are to be restricted from Chinese capital.
The White House memo, which brands China, Russia, Iran and North Korea as foreign rivals, advocates for tighter control over Chinese stock listings in the US.
US officials also plan to tighten restrictions on chips, introduced by Joe Biden and put pressure on Mexico to impose tariffs on China.
In China, it is believed that the US president will take a harder line against Beijing than in his first term and will implement a broader range of measures, including financial market measures. This is particularly bad news for Chinese technology stocks, which had recovered after the AI surprise from DeepSeek and the recent rehabilitation of Alibaba CEO Jack Ma.
It is unclear whether Trump is pressuring Beijing to secure a better position for potential negotiations on a possible agreement. Xi has so far avoided a phone call with his US counterpart and responded to the first tariffs with modest measures.
Given that Xi can rule for life and Trump only has a four-year term, the Chinese leader’s strategy might be to do as little as possible and simply observe how Washington reshapes global trade, potentially leaving US allies in the lurch.