Following the extraordinary tariff war between President Trump and China, one expert says that the communist country’s continued reluctance to negotiate its trade policies and its irrationally aggressive military actions is leading to an economic downturn in China that could be a sign of the impending downfall of Xi Jinping’s regime.

On Wednesday, The New York Times reported that manufacturing activity in China had begun to slow in April, one of the first indications that Trump’s 145% tariff on Chinese goods is starting to have an effect. The Wall Street Journal reported that China-to-U.S. container shipment bookings are currently down by at least one-third.

Meanwhile, as reported by author and China expert Gordon Chang, despite tough talk by communist government officials, China is quietly attempting to negotiate with the U.S. and is secretly waiving its 125% retaliatory tariff on certain U.S. goods that it cannot manufacture, including airplane parts and industrial chemicals. “Xi Jinping’s regime simply cannot admit that it is not able to stand up to Washington,” Chang wrote.

On Tuesday, Chang joined “Washington Watch” to analyze the economic situation in China, remarking that the communist regime’s current woes are deserved because of its past predatory behavior.

“[I]t’s criminal because China’s been stealing hundreds of billions of dollars of U.S. intellectual property each year, probably on the order of a half trillion dollars annually,” he pointed out. “But it’s increasingly predatory because China has failed to honor its trade obligations, especially those that it took on when it acceded to the World Trade Organization. So we have a China right now that is ramping up its export production, giving subsidies, all sorts of things that are not permitted under the rules that it had accepted. And that’s why President Trump imposed his tariffs, and that’s why other countries also have imposed tariffs on Chinese goods, because they don’t want to have China decimate their industries as China decimated ours.”

Chang, who serves as a distinguished senior fellow at the Gatestone Institute, went on to note that Trump’s tariffs are contributing to the continued downsizing of China’s economy, which was already happening before the tariffs.

“We’re starting to see factories close, especially in the export sector in the south,” he observed. “The layoffs are going to start rolling, they’re going to even be worse than they have been. Even before Liberation Day, the Chinese economy probably was contracting. You know, China claims 5.4% growth in the first quarter, but when we look at the price data, we see an economy in deflation, and that’s hard to reconcile an economy in a deflationary spiral with robust growth. So now when China can’t export because of these tariffs, because their exports are way down, I think we’re going to see a Chinese economy that will be plunging.”

Chang further commented that Beijing is not doing itself any favors by its aggressive military activity toward other countries, which could be an indicator that the communist regime is experiencing the beginning of its end.

“In the last three weeks, we’ve seen very provocative Chinese military activity directed against South Korea, Japan, Taiwan, the Philippines, and Australia,” he explained. “Now, this is at a time when China actually needs friends because it needs to export more. Remember, it’s not exporting many goods to the U.S., and it needs to sell those to other countries, and yet it is making enemies of other countries, especially countries in the region very close to China’s shores. … It’s extremely counterproductive, nonsensical. And so, I think that the ‘end of regime’ behavior is a perfect description for what China is doing right now. It just looks of desperation [and is] irrational.”

In addition, Chang highlighted how massive layoffs could affect Chinese workers. “[T]he investment banks are talking about layoffs of 16 million, and it could very well be more than that, because we’re dealing with an export sector that has basically no customers. It was ailing last year, and now with the tariff war, it is in a position where China can’t do very much except try to give subsidies or social benefits to laid-off workers.”

Chang concluded by arguing that Trump’s trade war against China has already resulted in the powerful country making key concessions to the U.S.

“[W]hat we see is China trying to give concessions in the dark, such as eliminating tariffs on essential American goods such as aviation parts, industrial chemicals, some semiconductors, medical devices, medicines,” he detailed. “They don’t want to talk to the United States for various political internal reasons, but they will give concessions, and that is actually folding. You know, a lot of people say President Trump folded, but no, I don’t think he did. But clearly, China is.”