The following is an excerpt from an op-ed written by Lizzi C. Lee, Fellow on Chinese Economy at ASPI's Center for China Analysis, and published in The Diplomat.

As the China-U.S. tariff war enters yet another phase of escalation, with Trump 2.0 proposing new hikes that push the effective U.S. tariff burden on Chinese goods to a staggering 145 percent and Beijing responding by raising its tariffs on U.S. goods to 125 percent, Chinese policymakers have shed any lingering illusions of an imminent thaw. The headlines may center on retaliatory tariffs and shipping slowdowns, but beneath the surface, a more consequential shift is unfolding: a long-term strategic recalibration aimed not at out-escalating Washington, but at enduring it.

In addition to matching Washington blow-for-blow, China is moving cautiously yet deliberately to manage exposure, mitigate damage, and reposition itself globally. This emerging strategy is organized into three concentric layers of response. At its core is an all-out push to stabilize the domestic economy. The middle ring focuses on placing targeted pressure back on the United States, measured and mindful of cost-benefit tradeoffs. The outermost circle turns to the broader world, where China is working to counter diplomatic isolation and carve out space in an increasingly polarized global order.

Read the article here.