With the U.S.–China trade conflict deepening, former foreign correspondent and China expert Ian Williams joined Chicago’s Morning Answer with Dan Proft and Amy Jacobson to unpack the geopolitical and economic chess match now unfolding between Washington and Beijing.
Williams, author of Vampire State: The Rise and Fall of the Chinese Economy, painted a sobering picture of China’s economic fragility and the high-stakes gamble currently playing out. While the U.S. continues to raise tariffs and apply pressure to Beijing, Williams warned that China may not be as close to capitulating as the Trump administration hopes.
“China’s betting that the U.S. will blink first,” Williams said. “Yes, the Chinese economy is vulnerable, but it’s still a dictatorship. The threshold for economic pain is much higher there than it is in the U.S.”
He noted that the Chinese regime, under President Xi Jinping, has a history of leveraging nationalism and external conflict to distract from internal issues—tactics being employed now as economic pressures mount. Among them: limiting the number of U.S. films imported into China and using military exercises around Taiwan as both a warning and a show of strength.
Williams argued that China’s Communist Party is increasingly behaving like a nationalist entity. “Xi leans into xenophobia and economic bullying,” he said. “It’s a system well-versed in coercion—of businesses, foreign governments, and its own people.”
While the Biden administration under Trump 2.0 has paused additional tariffs on U.S. allies to create a united front against China, the Chinese government has begun selectively redirecting shipments and imposing boycotts in retaliation. Despite these moves, Treasury Secretary Scott Bessant and top Trump advisers maintain that China needs the U.S. more than the reverse.
Williams cautioned that such confidence might be misplaced. “China has been preparing for this confrontation for a while,” he said. “They’ve diversified trade, built infrastructure in other nations, and are increasingly rerouting exports through third countries like Vietnam and Thailand.”
Though Beijing faces an ongoing property crisis, high youth unemployment, and a flawed economic model, Williams believes Xi is willing to endure short-term pain if it means resisting Western demands. At the same time, he acknowledged that the Communist Party’s legitimacy is closely tied to its ability to maintain economic growth and public order.
“Xi can’t ignore unrest completely,” Williams added, citing the end of the country’s zero-COVID policy after a wave of nationwide protests. “If pressure builds too much, there’s a risk of widespread dissent.”
The conversation also touched on possible U.S. leverage points beyond tariffs, including restrictions on student visas and sanctions targeting elite Chinese individuals. While Williams agreed these could be useful tools, he noted that China’s leadership may see the exodus of wealthy citizens and entrepreneurs as a positive purge rather than a loss.
As American consumers brace for higher prices and reduced product choices, Williams predicted a gradual shift away from Chinese manufacturing dominance. “The era of cheap, made-in-China goods may be coming to a close,” he said, though he acknowledged that alternatives like Vietnam, Indonesia, and India are already stepping in to fill the void.
When asked about Trump adviser Stephen Miller’s assertion that China would soon be forced to the negotiating table, Williams remained skeptical. “Xi won’t fold easily,” he said. “This may be a long and difficult standoff.”
Despite Beijing’s defiance, Williams didn’t rule out a resolution. But he warned that as the pressure builds, the risk of miscalculation increases—particularly with Taiwan in the crosshairs. “It’s a distraction for Xi, but a very dangerous one,” he concluded.
For now, the world watches as two economic superpowers continue their high-stakes duel, with ripple effects felt from Main Street America to the shipping lanes of the South China Sea.