The Donkey of Guizhou

Both sides of the trade war believe they hold the stronger position. American leadership sees leverage and advantage. Chinese leadership sees the same. This mutual confidence in a winning hand isn't a negotiating position. It's the setup for a collision.

• A 1,200-year-old fable governs how Beijing sees this conflict. The Donkey of Guizhou, known to every member of the Chinese Politburo, tells the story of a creature that looks powerful but can only do one thing. Once the tiger discovers its limits, the outcome is inevitable.
• The fable isn't metaphorical to Chinese leadership. It's their operating manual. They believe they are reading American strategy with the clarity of the tiger observing the donkey. They think they understand exactly what Washington can and cannot do.
• Washington operates from a completely different narrative about who holds power. American leadership believes it has leverage and a stronger hand. The confidence level is identical. The assessments are opposite.
• When both players in a game of chicken believe they're driving the stronger vehicle, the game stops being about economics. It becomes about which side will swerve first. Tariffs and currency moves become secondary to political will and national pride.
• A collision in this scenario isn't prevented by who has more resources. It's determined by who blinks. And if both sides are genuinely convinced they won't need to, the cost of being wrong gets paid by everyone.