Despite their denials, China is losing the tariffs war and retreating as fast as it can

As President Trump brings manufacturing back to the US — and closes in on trade deals with India, Japan, and South Korea — China’s days as “the world’s factory floor” are numbered.  And Beijing is furious. 

In a move harking back to the Cultural Revolution, Chinese schoolchildren are again being taught to hate the US. Class time is devoted to shouting anti-American slogans like “China must win the China-US trade war!”

China’s foreign ministry even released a video claiming that China “won’t kneel down” to the US, warning that bowing to US hegemony would be like drinking poison. At the BRICS meeting in Rio this week, Foreign Minister Wang Yi talked tough as well: “Silence or retreat will only embolden bullies.”

But it turns out that — in secret — Beijing has been quietly retreating as fast as it can.

Trump divulged in a Time magazine interview on April 25 that China’s Xi Jinping contacted him directly about tariffs, and later affirmed that he has since spoken with the Chinese dictator “many times.” 

The Korean press has confirmed that “the United States and China have begun behind-the-scenes contact in relation to the ‘tariff war,’ ” and a high-ranking Chinese delegation was photographed entering the US Treasury Department in the early morning hours of April 24.  

The hush-hush negotiations over trade have already begun to bear fruit, with China unilaterally reducing its punitive tariffs on 131 American goods.

Not surprisingly, the regime continues to lie to the Chinese people and to the world about all this.  

Guo Kiakun, an official with the Chinese Foreign Ministry, has repeatedly claimed that no tariff negotiations have taken place. 

Any suggestion otherwise is “groundless” and “fake news,” said Guo, who urged the US to stop “misleading the public.”

Understand that the “public” that Guo is worried about “misleading” does not live in America, but in China.

You see, China’s state media has portrayed Xi Jinping as heroically standing up to Trump.

The Chinese have been told that not only did their stalwart leader, alone among all world leaders, match Trump’s tariffs with his own, but that he has stood strong and never, ever backed down.

Think of how much face Xi Jinping will lose when the Chinese people learn that he, after grandstanding on tariffs, has caved.  But Xi Jinping has, and for good reason.  

The signs of China’s impending economic collapse are everywhere: 

• They are in the huge piles of containers that missed the April 9 tariff deadline, sitting in Chinese ports. These are filled with goods that the tariffs have priced out of the US market. Meanwhile, cargo bookings for container voyages between China and the US are down by half. 
• They are in deserted factory floors all along the coast of China, where workers are being laid off by the tens of thousands.  Textile, toy, electronic, and furniture factories are just a few of the industries being crushed by the tariffs.
• They are in the empty streets and shuttered shops of the surrounding industrial towns and cities, whose one-time customers — the now unemployed factory workers — can’t afford to eat or shop in their favorite noodle stand or convenience stores.

America is by far China’s largest customer, absorbing about one-sixth of China’s exports.  If the tariffs stay in place for any length of time, economists estimate that 80% of China’s goods will be priced out of the American market, representing a loss of almost $400 billion. 

As many as 10 million Chinese workers might lose their jobs over the next few weeks, says Treasury Secretary Scott Bessent, a number that could easily double in the months that follow as the ripple effects of the slowdown tear through the economy.

Beijing’s biggest worry is not a tariff recession, but the social unrest that will follow.

The country’s unemployment rate was already well over 10% before Trump’s tariff increases.  With millions joining the ranks of the unemployed, it is only a matter of time before they take to the streets.

Beijing officials continue to bluster in public, echoing Wang Qishan, the former vice president of China and a close ally of Xi Jinping, who says: “We are not afraid of a trade war with the US. The Chinese people can survive an entire year eating nothing but grass.”

Privately, however, they are worried about a reprise of the 1989 Tiananmen demonstrations.

That’s why Xi’s calling.

Steven W. Mosher is the president of the Population Research Institute and the author of “The Devil and Communist China.”