Xi Warns US Against Renewed Trade War, Amidst Rising Tensions

Chinese President Xi Jinping has issued a stark warning to the United States against reigniting a trade war, asserting that such a conflict would benefit no one, CNN reports.

His comments, made Tuesday during a meeting with heads of global financial institutions including the World Bank and IMF, come a day after China launched an antitrust investigation into US chipmaker Nvidia.

The Nvidia investigation is widely viewed as a significant escalation in the intensifying competition for artificial intelligence (AI) dominance, a strategic area both Washington and Beijing deem crucial for national security.

“Tariff wars, trade wars, and technology wars go against the historical trend and economic laws, and there will be no winners,” Xi said, according to state broadcaster CCTV.

He further cautioned against policies of “decoupling and breaking chains,” emphasizing that such actions would ultimately harm all involved. Xi reiterated China’s belief that its own prosperity is intertwined with global prosperity.

Xi’s remarks directly address the “small yard, high fence” strategy articulated by US National Security Advisor Jake Sullivan, which aims to selectively restrict trade with China, particularly in high-tech sectors. Last week, the Biden administration announced a third round of export controls targeting Chinese access to semiconductor manufacturing equipment and advanced chips, impacting over 100 Chinese companies.

Adding to the tension, incoming US President Donald Trump recently threatened to increase tariffs on Chinese goods by 10% above existing levels until China halts the flow of illegal drugs into the US. While Trump claimed recent communication with Xi, a spokesperson for China’s Foreign Ministry offered no confirmation.

China’s export-dependent economy is facing headwinds. Official data released Tuesday revealed a sharp decline in exports and an unexpected contraction in imports last month. November’s export growth of 6.7% fell significantly short of expectations and October’s 12.7% increase. While some analysts suggest this slowdown may be temporary, the looming threat of increased US tariffs could further impact export volumes.

In response to the economic challenges, the Communist Party’s Politburo announced a shift towards a “moderately loose” monetary policy, marking the first easing since 2010.