Business
Trump is threatening to raise tariffs again. Here's how China plans to fight back
TAIPEI, Taiwan — President-elect Donald Trump has threatened to impose new tariffs on Chinese imports when he takes office, a move that would deepen a trade war he started six years ago.
He has not offered many specifics, but China is already arming itself for economic battle.
“Six years of really intense, focused preparatory work has gotten the top leaders in Beijing ready to deal with whatever comes down the pike,” said Even Pay, an analyst with research firm Trivium China.
Here’s a look at how the showdown between the world’s two largest economies played out the last time Trump was in office and where things might be headed now.
What happened during Trump’s first term?
Trump kicked off a trade war in 2018 by imposing 25% tariffs on imports from China — including industrial machinery, cars, auto parts and television cameras. Those goods accounted for about $50 billion of the $540 billion the United States spent that year on Chinese-made products.
The aim was to spur U.S. manufacturing, reduce a trade imbalance and punish China for trade practices Trump said were unfair. China imported just $120 billion in U.S. goods in 2018.
China responded with its own 25% tariffs on about $50 billion of those goods.
Despite trade talks over the next year, each country continued to impose more tariffs. By 2020, tariffs had been applied to a total of $550 billion in Chinese goods and $185 billion in U.S. goods.
Experts said the trade war did little to mitigate the U.S. trade deficit or boost U.S. exports. Instead, they said it weighed on economic growth and cost jobs in both the U.S. and China.
In the final year of Trump’s term, the two nations agreed to a truce, signing a trade deal that scrapped some tariffs and reduced others. China also agreed to purchase an additional $200 billion in U.S. goods and services — a pledge it failed to fulfill.
Hank Wetzel speaks from inside the wine cave at Alexander Valley Vineyards in Healdsburg, Calif., in 2019 as the company faced retaliatory tariffs on its exports to China.
(Josh Edelson / For The Times)
Did things cool off after President Biden took office?
Not really. The rhetoric coming from the White House was less hostile, but getting tough on China had become a political necessity for whoever was president, and the trade war only intensified.
Biden kept the Trump-era tariffs and added some of his own, including a 100% tax on imports of electric cars from China, a 50% tax on solar panels and a 25% tax on lithium-ion batteries and steel and aluminum products.
Biden has also continued the first Trump administration’s use of export bans to curb China’s access to U.S. technology. Last week, the U.S. expanded restrictions on sales of semiconductors and related manufacturing equipment to China and added 140 Chinese entities to a blacklist that limits trade with U.S. businesses on national security concerns.
What might Trump do this time?
For months he has advocated for raising tariffs on imports from China by 60% or more. He said on social media last month that he would impose a 10% tariff, “above any additional tariffs,” on all products from China.
His motivations are not entirely based on leveling trade or boosting U.S. manufacturing. Trump has also talked about using the threat of tariffs to spur China — as well as Mexico — to do more to help curb the U.S. opioid crisis. The two countries are the top sources of fentanyl and the chemicals used to make it.
How is China preparing for more tariffs?
China has already taken numerous steps to protect itself.
The country, which typically buys corn, soybeans and sorghum from the U.S., has been diversifying its sources and stocking up. Brazil has been one of the big winners. The damage could be significant for U.S. farmers, who sell about 77% of their sorghum exports to China.
China, though, is more vulnerable than the United States when it comes to tariffs — for the simple reason that it exports so much more than it imports.
The current economic situation in China doesn’t help. Growth has stagnated as the country struggles with a real estate downturn, growing debt, rising youth unemployment and a slowdown in consumer spending.
Larry Hu, chief China economist at the Australian bank Macquarie Group, estimated that a 60% tariff hike from the U.S. would reduce Chinese exports by 8% and GDP by 2%. If the U.S. enacts tariffs on goods from other countries as well, that would exacerbate the effect on China, which has been able to circumvent some tariffs by exporting products destined for the U.S. through third-party nations.
An employee works on the production line at Jiangsu Poppula Semiconductor Co. in Suqian, China, in October.
(Fang Dongxu / VCG via Associated Press)
How can China go on the offense?
Perhaps China’s biggest weapon in the trade war is its dominance in crucial materials that the U.S. needs to make products such as semiconductors and missiles. After the latest round of tech trade restrictions last week, China retaliated by banning exports of the rare elements gallium, germanium and antimony — cutting off at least half the U.S. supply, based on data from the U.S. Geological Survey.
The move was widely seen as a warning shot to the next administration of its ability to stall U.S. advancements in key strategic industries.
China can also fight back with monetary policy. During the last trade war, the country allowed the yuan to depreciate against the U.S. dollar, effectively making Chinese exports to the U.S. cheaper. The U.S. labeled China a currency manipulator, an accusation Beijing denied.
And after the U.S. began blacklisting Chinese companies during the first Trump administration, China launched its own list of entities deemed a threat to its national interests. This means the Chinese government can swiftly sanction U.S. individuals and businesses in retaliation for trade restrictions or other efforts to constrain development.
In September, China launched a probe into PVH Corp. — the parent company of apparel brands such as Calvin Klein and Tommy Hilfiger — which it said has unfairly boycotted Xinjiang cotton. The U.S. has accused China of genocide against Muslim ethnic groups there and prohibits companies from using products suspected of being made with forced labor.
And on Monday, China opened an antitrust investigation into U.S. semiconductor giant Nvidia, whose value has soared this year amid an AI boom and increasing demand for advanced microchips. The U.S. has barred Nvidia from selling some of its most powerful chips to China.
If the trade war intensifies, the scope of targeted companies could broaden and China might also try to inconvenience U.S. businesses with operations in China by banning staff, restricting sales or initiating onerous compliance inspections or audits.
What are the downsides for China?
China may have the power to inflict serious damage on the U.S. economy, but it has to be careful about using it.
Ja-Ian Chong, associate professor of political science at the National University of Singapore, said that punishing U.S. operations in China could chill foreign investment and accelerate plans to move to other countries at a time when China is trying to attract more international business.
And preventing all crucial materials from reaching the U.S. would be difficult to enforce, considering the complex global supply chain, and might alienate other trade partners such as Taiwan or South Korea in the process.
“Beijing has options, but these options are not cost-free,” Chong said. “It comes down to how far China is willing to go.”
Early in April, Ruben Hallali got an unusual alert on his phone: The evening temperature at Paris Charles de Gaulle International Airport had jumped about 6 degrees Fahrenheit in seconds.
Mr. Hallali, the chief executive of the weather risk company Sereno, had set up notifications for extreme weather swings. Then, nine days later, it happened again.
“It was an isolated jump, at one single station, early in the evening,” said Mr. Hallali, who added that he noticed another strange coincidence about the spikes: The timing was just right for somebody to reap a windfall on the betting site Polymarket.
He wasn’t the only one who sensed a problem. Météo-France, the country’s national meteorological service, filed a complaint last week with the police and local prosecutors, saying it had evidence that a weather sensor at Charles de Gaulle, the country’s largest airport, may have been tampered with.
The temperature swings, experts said, coincided with a period of unusual activity on Polymarket, one of the leading online prediction markets, which allow users to wager on the outcome of virtually anything.
One increasingly popular area is weather betting, where speculators can make real-time wagers on temperature readings, rainfall totals, the number of Atlantic hurricanes in a year and much more — with payouts in the thousands of dollars and higher.
As the stakes rise, so has the temptation to tamper with the instruments used to generate weather readings in hopes of engineering a lucrative outcome. Experts warn that this could have dangerous ripple effects, like degrading the information that underpins safe air travel.
Temperature data is used in a host of calculations at airports, helping determine correct takeoff distance, climb rate and whether crews need to apply frost treatment to planes. It’s crucial to airport safety, Mr. Hallali said.
“The Charles de Gaulle incident is not an isolated curiosity,” Mr. Hallali said. “It is what happens when financial incentives meet fragile data infrastructure.”
On April 6, the temperature reading at Charles de Gaulle jumped from 64 degrees Fahrenheit to 70 degrees at 7 p.m., before slowly falling over the next hour, according to data from Météo-France.
On April 15, the recorded temperature climbed even more sharply, from 61 degrees at 9 p.m. to 72 at 9:30 p.m., then dropping back to 61 a half-hour later.
In both instances, the spikes set the high temperature for the day, the metric on which some Polymarket wagers rest.
Laurent Becler, a spokesman for Météo-France, said the service contacted the police after noticing the discrepancies in temperature data. He declined to comment further on the case, saying it was under investigation.
Mr. Hallali said that after the first instance, experts and commenters on the French weather forum Infoclimat began to search answers. Theories were floated, including user error. But after the second spike, commenters zeroed in on the unusual Polymarket wagers, which totaled nearly $1.4 million over the two days, according to the company’s data.
The sums bet on April 6 and 15 were hundreds of thousands of dollars higher than on typical days this month.
It is not the first time that strange bets on prediction markets have raised accusations of insider trading.
On Thursday, a U.S. Army special forces soldier who helped capture President Nicolás Maduro of Venezuela in January was charged with using classified information to bet on outcomes related to Venezuela, making more than $400,000 on Polymarket. Late last year, another trader on the site made roughly $300,000 betting on last-minute pardons from President Joseph R. Biden Jr. before he left office.
Polymarket did not immediately respond to a request for comment. While the site used to tie some bets to temperature readings at Charles de Gaulle, this week, after Météo-France filed its complaint, the platform began using temperatures taken at another airport near the city, Paris-Le Bourget, according to recent bets on the site.
Representatives for Charles de Gaulle airport declined to comment beyond saying that the case was under investigation. The airport police also declined to comment. The Bobigny Public Prosecutor’s Office, which is handling the case, declined to answer questions about the investigation but said that no complaint had been filed against Polymarket.
As to how the instruments could have been tampered with, a number of theories have been offered online, including by use of a hair dryer or a lighter. Mr. Hallali said that the precision of the spike on April 15 suggested the use of a calibrated portable heating device, although he declined to speculate about what kind.
“Markets are expanding into every domain where an outcome can be observed, measured, and settled,” he said. “As these markets multiply, so does the surface area for manipulation.”
As the war in Iran strangles the flow of oil around the globe, California’s jet fuel reservoirs are running low.
The state — which refines much of its own fuel in El Segundo and elsewhere but still relies on crude oil imports — has seen its jet fuel stock decline by more than 25% from last year’s peak to a level not seen since 2023, according to data from the California Energy Commission.
The supply is shrinking as a global shortage is already affecting travelers’ summer plans with canceled flights and higher fares. It could even affect plans for people coming to Los Angeles for the 2026 World Cup, which starts in June, said Mike Duignan, a hospitality expert and professor at Paris 1 Panthéon-Sorbonne University.
“People don’t know exactly how this is going to escalate,” he said. “There’s a huge black cloud over the sea for the World Cup and the travel slump that we’re seeing is all linked to this oil shortage.”
As fuel supplies shrink, flight prices are rising. Airlines are adding baggage surcharges to cover fuel costs. Several routes leaving from smaller California hubs, including Sacramento and Burbank, have already been canceled.
Air Canada has suspended flights for this summer, cutting routes from JFK to Toronto and Montreal.
“Jet fuel prices have doubled since the start of the Iran conflict, affecting some lower profitability routes and flights which now are no longer economically feasible,” the airline said in a statement last week.
Europe had just more than a month’s supply of jet fuel left last week, the International Energy Agency said. In an effort to cut costs, the German airline Lufthansa slashed 20,000 flights from its summer schedule this week.
Without a fresh oil supply flowing through the Strait of Hormuz, the situation is unlikely to improve, experts said. The oil reserves countries and companies have in storage are helping fill shortfalls, but the squeezed supply chain could still wreak economic havoc.
“When there’s a shortage somewhere, everything is affected,” said Alan Fyall, an associate dean of the University of Central Florida Rosen College of Hospitality Management. “Airlines are being cautious, and I would say that is a very wise strategy at the moment.”
California’s jet fuel stock reached its lowest levels in two and a half years at 2.6 million barrels last week, down from a peak of more than 3.5 million barrels last year.
The California Energy Commission, which tracks fuel inventory, said the state’s current jet fuel stock is sill sufficient.
“Current production and inventory levels of jet fuel are within historical ranges,” a spokesperson said. “Although supply is tight, no structural deficit has emerged yet. The present tightness reflects short‑term global market stress. As long as refinery operations remain stable, California is positioned to meet regional jet fuel needs.”
Europe has been affected more directly because it relies on the Middle East for the vast majority of its crude oil and many refined products, experts said. California gets crude oil from the Middle East but also from Canada, Argentina and Guyana.
The state has the capacity to refine around 200,000 barrels of jet fuel per day, most of it from refineries in El Segundo and Richmond.
The amount of crude oil originating in the state has been declining since the early 2000s, as state regulations and drilling costs have led to more imports.
California has become particularly vulnerable to supply-chain shocks like the war in Iran, says Chevron, one of the companies that provides jet fuel in the state.
“The conflict in the Mideast Gulf has exposed the danger of California’s decision to offshore energy production,” said Ross Allen, a Chevron spokesperson. “Taxes, red tape and burdensome regulations cost the state nearly 18% of its refinery capacity in just the past year, and we urge policymakers to protect the remaining manufacturing capacity.”
In 2025, 61% of crude oil supply to California’s refineries came from foreign sources, according to the California Energy Commission. Around 23% came from inside the state, down from 35% five years ago.
The state’s refining capacity has also been declining, said Jesus David, senior vice president of Energy at IIR Energy. The West Coast region’s refining capacity has decreased from 2.9 million to 2.3 million barrels a day since 2019, he said.
“California’s had issues prior to the war,” David said. “Nothing new has been built over the past 30 years, and California has closed a lot of capacity.”
The result is higher prices for both gasoline and jet fuel in the state. Jet fuel at LAX costs close to $15 per gallon this week, compared with almost $10 at Denver International Airport and $11 at Newark International Airport.
Gasoline prices have also been hit hard by the global conflict. Average gas prices in California are close to $6 a gallon, around $2 higher than the national average.
The West Coast is a “fuel island” because it’s not connected by pipelines to the rest of the country, United Airlines chief executive Scott Kirby said in an interview last month. That means oil and refined products have to be brought in by ships.
“Fuel price is more susceptible to supply weakness on the West Coast than anywhere else in the country,” Kirby said.
Some airlines might not survive the turmoil if oil prices don’t level out soon, he said. Spirit Airlines, a budget carrier based in Florida, is reportedly facing imminent liquidation if it isn’t bailed out by the Trump administration.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
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