Trump Says Xi Called—China Denies, But Quietly Lifts U.S. Tariffs

Amid the US-China tariff storm, a small but bitter detail surfaced. According to Donald Trump, Xi Jinping had to call and plead. In a Time interview on April 22, 2025, Trump firmly stated, He called. I don't see that as weakness. China's foreign ministry swiftly denied the claim, dismissing it as disinformation. Meanwhile, at the CCP Politburo meeting in late April, calls echoed for baseline thinking and preparation for the worst. Behind their defiant facade, the CCP quietly rolled back several retaliatory tariffs on US goods, from semiconductors to medical devices. It's the gesture of a losing side trying to save face, raising a fist while quietly conceding. But in this brutal trade war, who's really bleeding more? How are American and Chinese businesses holding up under fire? Let's break it down, from the CCP's stubborn stance to the cold, hard market numbers. Politburo meeting Arrogance on the brink of survival The late April 2025 CCP Politburo meeting, chaired by Xi Jinping, was a spectacle worth noting. State media framed it as a session to analyze economic conditions, propose measures to support businesses, boost consumption, and stabilize food prices. But beneath the polished rhetoric lay a far more tense message. External shocks are intensifying, and there's a need to reinforce baseline thinking and fully prepare contingency plans. The phrase baseline thinking is no coincidence. It harks back to the Cultural Revolution, when Mao Zedong urged the masses to brace for war and famine. Today, the CCP revives this language to signal a grim scenario. Economic recession, social unrest, and even the risk of regime collapse. Yet, instead of admitting vulnerability, the party maintains a defiant tone, branding Trump's tariffs as bullying and vowing to fight to the end. However, actions tell a different story. According to the Financial Times, the CCP has quietly lifted retaliatory tariffs on key U.S. imports like semiconductors, pharmaceuticals, and medical equipment. Reuters further revealed a list of 131 American products granted exemption from a 125% tariff, though Beijing has yet to officially confirm it. This is a clear sign of concession, but the CCP dares not admit it publicly. Why? Because acknowledgment would shatter the great and righteous image they've carefully crafted, exposing weakness to 1.4 billion citizens already growing frustrated with a deteriorating economy. It's like a battered boxer, bloodied and bruised, still shouting, I haven't lost, while the corner quietly throws in the towel. The CCP is desperately clinging to its pride, but the cracks in its arrogant facade are becoming impossible to hide. The Trade War Who's taking the bigger hit? The U.S.-China trade war, marked by America's tariffs of up to 145% on Chinese goods and China's 125% retaliatory tariffs, is an unrelenting economic battle. But the damage isn't evenly spread. As the door to U.S. exports slams shut, millions of Chinese businesses, from plastic factories in Guangdong to garment workshops in Zhejiang, descended into a nightmare. Take a look at a once-bustling plastic factory in Shenzhen, where bright lights and roaring machines have fallen silent. Now, the factory yard sits deserted, with a handful of workers staring blankly at piles of scrap. According to Bloomberg, April 22, 2025, China's plastic plants are shutting down en masse due to their reliance on U.S.-imported ethane, a critical petrochemical feedstock. The 125% tariff on U.S. goods sent ethane costs soaring, leading to losses of $184 per ton processed. China, the world's largest plastic producer, accounting for 30% of global output, only produces 12,000 tons of ethane domestically each year, barely a drop in the ocean. There's no alternative supply, as the ethane market runs on long-term contracts with virtually no spot availability. Neither Saudi Arabia nor Russia can fill the gap. The result? Over 40% of plastic factories along China's coastlines have halted production, according to Ristead Energy. Workers who once labored 12-hour days for 4,000 yuan a month are now unemployed, wandering the streets. The high-tech sector hasn't escaped the tariff blade either. Huawei, once China's crown jewel, now resembles a warrior with a severed arm. U.S. restrictions on advanced chip exports, combined with tariffs, have cut off supplies from NVIDIA and TSMC. As reported by the South China Morning Post April 23, 2025, Huawei only has enough chips to keep phone production running until the end of 2025, with its AI projects nearly paralyzed. Rising AI star DeepSeek faces a similar fate. Despite launching a model to compete with Grok3, the company remains dependent on Silicon Valley funding and U.S. open-source software. With tightened U.S. controls, DeepSeek finds itself talented but with nowhere to perform. One anonymous engineer told Nikkei Asia, We have ideas, but no chips, no data, no money. How can we compete? Next, we visit a garment factory in Wenzhou, Zhejiang, once a major supplier of T-shirts for brands like Gap and Nike. The factory used to export 200,000 shirts a month to the U.S., making up 70% of its revenue. Now, with tariffs driving prices up by 145%, U.S. orders have vanished. The factory owner laments, American buyers have shifted to Vietnam and Bangladesh. I've got containers of unsold stock, but no one to sell to. The workers here are suffering even more. Once earning 3,500 yuan a month, many are now jobless, unable to pay rent, counting every penny for food. They are just a fraction of the estimated tied to U.S. export industries, according to Goldman Sachs. As American orders dry up, millions are being pushed into poverty. It's not just businesses bearing the brunt of the trade war. Ordinary Chinese citizens are suffering, too. In rural areas, where farmers once thrived by exporting produce to the U.S., heartbreaking scenes now unfold. Fields piled high with rotting fruit, left unsold. In Shandong, China's apple capital, farmers like Mr. Liu are in despair. In 2023, China exported 1.2 million tons of apples to the U.S., worth $1.5 billion. But the 145% tariff has slammed that market shut. The apples are stacked in cold storage, but no one's buying. I've had to dump tons of them, Mr. Liu told Global Times. Domestic prices have plummeted by 40%. Yet with Chinese consumers tightening their belts, even discounted fruit finds no buyers. Similar scenes play out in Guangxi with dragon fruit and in Yunnan with coffee. According to China Daily, dragon fruit exports to the U.S. dropped 60% in Q1 2025, leaving thousands of tons rotting on the trees. Farmers, unable to afford fertilizer, are abandoning their fields and flocking to cities in search of work, only to find factories shutting down as well. The hardship doesn't end in the countryside. In urban centers, unemployed workers are taking to the streets, and protests are on the rise. On April 20, 2025, hundreds of plastic factory workers in Shenzhen protested after going unpaid for three months. Police quickly cracked down, but viral videos on Weibo captured one worker shouting, we have nothing to eat. What has the party promised us? Goldman Sachs predicts that without a major stimulus package, China's GDP will fall to just 0.8% in Q2 2025, down from 4.9% in Q1. A wave of bankruptcies and unemployment could push millions into poverty, igniting widespread unrest. The CCP is fully aware of this looming crisis, but instead of addressing it, they continue to mask the truth with propaganda, insisting that America is losing. American businesses, wounded but far from defeated. On the other side of the trade war, American businesses have certainly felt the pain, but they've shown remarkable resilience. China's 125% tariffs have nearly shut U.S. products, ranging from agriculture to aircraft, out of the Chinese market. U.S. oil exports to China have plunged by 90%, and lumber exports are down 40% compared to 2019, according to the Wall Street Journal. Yet American companies possess two key advantages China lacks— flexibility and policy support. Retail giants like Walmart, Target, and Best Buy were prepared well in advance. Bloomberg, April 22, 2025, reports that Walmart reduced its reliance on Chinese goods by shifting its supply chain to Mexico and India. With 60% of its operations automated, Walmart boosted inventory efficiency and eased cost pressures. Best Buy breathed a sigh of relief when Trump exempted phones, computers, and TVs made in China from tariffs. Smaller retailers even turned crisis into opportunity. BJ's Wholesale Club ramped up domestic sourcing, using a treasure-hunt shopping model to attract customers. Ollie's Bargain Outlet snapped up discounted inventory from Chinese companies hit by canceled orders, transforming tariffs into a business advantage. Foot Locker cut its dependency on Chinese goods from its 2018-19 peak, shifting to private-label products sourced from Southeast Asia. American inventory management has also been impressive. Target increased inventory by just 7% annually, focusing on trendy products to drive demand. Foot Locker kept inventory growth at 1%, ready to launch promotions at any time. Dick's Sporting Goods raised inventory by 18%, but as part of a strategic expansion plan. The result? The impact of tariffs on sales was far less severe than expected. Best Buy summed it up, the effect isn't linear because we can pivot our supply chains with agility. Moreover, Trump's policies provided breathing room. A 90-day tariff suspension for countries other than China, along with promises of bilateral negotiations, allowed retailers to adjust strategies. Trump also allowed the U.S. dollar to weaken, making American goods more competitive globally, though this move carries the risk of inflation. Comparing the damage, China is bleeding, America is just scratched. Overall, China has suffered far more severe losses than the U.S. Chinese businesses, heavily reliant on exports to America, now face a near-total shutdown of that market. Their supply chains, from plastics to tech, are collapsing under the weight of material shortages and dwindling capital. In contrast, while American companies have lost access to the Chinese market, they've been able to pivot to other markets and leverage the strength of the U.S. domestic economy. The numbers tell the story. Goldman Sachs forecasts China's GDP will fall to just 0.8% in Q2 2025. Meanwhile, the U.S. economy, though shaken, remains buoyed by domestic investment and flexible policymaking. The U.S. stock market has dropped 15% from its February 2025 peak, but investor sentiment stays optimistic, thanks to the adaptability of major retailers. In China, however, business confidence has hit record lows, with growing threats of strikes and mass bankruptcies. While Chinese citizens protest and abandon their farms, American farmers, despite being battered by China's retaliatory tariffs, continue to back Trump. According to The Wall Street Journal, April 22, 2025, even with U.S. oil exports to China down 90% and lumber down 40% from 2019 levels, Trump's agricultural support packages have kept farmers afloat. From Iowa to Nebraska, they still believe he'll make America great again, even if their wallets aren't as full as before. This unity is something the Chinese Communist Party can only dream of, because in China, faith in party promises has all but vanished. Moreover, the CCP lacks transparency and flexibility. American businesses can negotiate directly with Trump, as retail CEOs did at the White House on April 21, 2025. But in China, who would dare walk into Zhongnanhai and ask Xi Jinping to lift tariffs? The answer is no one, since making money for American imperialists is an accusation that could destroy anyone under public scrutiny. The CCP, pride or desperation? The Chinese Communist Party's bravado, from denying negotiations to vowing to fight to the end, can't hide its growing desperation. They know they're losing. The quiet removal of tariffs on U.S. goods is the clearest proof. But admitting defeat would shatter the image of invincibility they've crafted over seven decades. Yet Trump has effectively torn off that mask. At 4.09 a.m. on April 21, 2025, while Beijing was still asleep, Trump dropped a golden bomb on Truth Social. The golden rule of negotiation and success. Whoever holds the gold makes the rules. Thank you. Within hours, global gold prices surged to a historic $3,429 per ounce, while the U.S. dollar index plunged to a three-year low. That short but sharp post didn't just shake markets. It was a psychological strike aimed directly at the CCP. With America's 8,133-ton gold reserve, Trump was reminding Beijing who truly controls the game in this financial chess match. While Trump roams free on social media, turning every post into a strategic weapon, the CCP remains trapped in its own censorship cage. A similar post from Xi Jinping would be wiped from Weibo within minutes because acknowledging gold would be admitting the weakness of the yuan. Trump knows this, and he plays his hand openly, calling tariffs gold and declaring America the rulemaker. According to MeTrade, April 21, 2025, Trump's post pushed gold prices up by 1% in mere hours, while Chinese factories, from plastics to textiles, continued shutting down due to material shortages and collapsing orders. This moment symbolizes an unbridgeable gap. Trump, a master strategist using words to manipulate markets and rattle his opponents, the CCP, like an old lion, left growling in vain, unable to admit its losing. As gold becomes the emblem of power, Trump doesn't just hold the ace. He holds the rulebook. The U.S.-China trade war is ruthless, but the side suffering most is clearly China. Chinese businesses are collapsing under broken supply chains and shrinking export markets. American companies, though scratched, remain standing, thanks to flexibility and policy support. The CCP, despite its defiant posture, can't conceal its quiet concessions and fear of the worst-case scenario. The question is, will the CCP keep growling until it collapses? Or will it eventually be forced to beg Trump for relief? One thing is certain, in this game, Trump holds the upper hand while the CCP is merely trying to avoid being flipped off the table. And as always, it's the Chinese people who will pay the highest price for their regime's pride. What do you think about today's topic? Share your thoughts in the comments below. Thank you for watching and see you next time.