China Considers Retaliation Options Amid Trade Tensions with the U.S.

Amid escalating trade tensions with the U.S., China is weighing several countermeasures. These include devaluing the yuan to boost exports, restricting exports of key materials like tungsten, and imposing restrictions on companies operating in China. China could also strengthen ties with U.S. allies and reduce its holdings of U.S. debt. Devaluing the yuan could offset tariff effects but risks capital flight. Export restrictions on strategic materials could disrupt global supply chains, but might encourage diversification away from China. Targeting companies like Apple and Tesla could provoke U.S. retaliation. Selling U.S. debt could increase U.S. interest rates but devalue China's assets. While China's trade surplus limits its tariff options, U.S. tariffs could raise consumer prices. China's actions aim to balance economic impact with strategic leverage.