Over the past decade, China has focused on a “dual circulation” strategy (domestic ↔️ external), seeking to reduce its dependence on foreign markets while enhancing its position in global value chains. Now, in the face of U.S. strategic tariffs and economic pressure, Beijing has activated seven major “economic weapons” that could have deep strategic implications for both Washington and the global economic system.
1. Counter-tariffs and pressure on American consumers
By imposing—or threatening to impose—heavy tariffs on U.S. goods, China has intensified pressure on Washington while leveraging the advantage of its 1.4-billion-strong domestic market.
2. Export controls on rare earths and permanent magnets
The Chinese government has restricted exports of critical rare-earth elements such as dysprosium, terbium, and high-strength magnets by introducing strict licensing requirements—targeting U.S. technological and defense sectors.
3. Blacklists and institutional pushback against American firms
Through business restrictions, technology export bans, and “invisible sanctions,” Beijing has tightened the operating space for U.S. companies within China.
4. Exchange rate management and the internationalization of the yuan
Using monetary and currency policy tools, China seeks to elevate the yuan’s global standing and exert exchange-rate pressure on the U.S. dollar, potentially impacting key sectors of the American economy.
5. Export adaptability and market diversification
By expanding domestic markets and strengthening ties with Asian and African countries, China is diversifying its export channels to withstand U.S. economic coercion.
6. Subsidies, monetary policy, and state-backed incentives
The Chinese government continues to support key industries through subsidies, tax cuts, and preferential financing to maintain competitiveness and offset external pressure.
7. Reducing dollar assets and increasing gold reserves
By cutting its holdings of U.S. dollar assets and expanding gold reserves, China aims to weaken the dollar’s leverage while boosting its resilience against currency and sanctions shocks.
Taken together, these seven tools show that China’s response goes beyond tariff retaliation—it reflects a deliberate, structured strategy to penetrate U.S. economic frameworks and engage in long-term strategic competition. From Washington’s perspective, these developments underscore growing vulnerabilities in critical industries, technological dependencies, and export chains that demand serious reassessment.
At the same time, China’s actions are not merely reactive; they are part of a broader roadmap aimed at strengthening self-reliance, ensuring access to global markets, and redefining its role within the emerging world economic order. Within this context, the U.S. now faces challenges such as shortages of strategic materials, higher production costs, and consumer inflation.
Thus, a new era of strategic economic rivalry has begun between the two powers—one that cannot be explained merely through the lens of tariffs. It is a multidimensional battlefield where technology, raw materials, currencies, exports, and industrial policy are all interwoven—making the situation increasingly complex for Washington not only economically, but geopolitically as well.
NOURNEWS