China has condemned the “unilateral bullying” practices of the US, as it urged Washington to immediately drop the enormous tariffs that have been placed on Chinese goods.
Late on Wednesday night, the White House unveiled sweeping new tariffs on all imports to the US. Chinese goods, which were already subject to a 20% levy, received an additional 34% tariff, taking the total tariff to 54%. The additional levy, part of Donald Trump’s suite of so-called “reciprocal tariffs” targeted at specific countries, takes effect on 9 April.
China’s commerce ministry said on Thursday it would take “necessary measures to resolutely safeguard legitimate rights and interests” without specifying what they may be. “There are no winners in trade wars, and there is no way out for protectionism,” the ministry said.
The foreign ministry accused the US of “bullying” and said that other countries were also opposed to Trump’s new policies.
Official state media, however, were relatively muted on the topic. This reflected the fact that China, unlike other countries grappling with a new economic reality, is well accustomed to US tariffs, said Wang Wen, the dean of Renmin University of China’s Chongyang Institute for Financial Studies.
Exports accounted for about 20% of China’s GDP last year, with a last-minute push in December as exporters rushed to ship goods before anticipated tariffs from the US. Exports to the US jumped nearly 16% in December.
Many of China’s main export products, such as electric vehicles and solar panels, are effectively already blocked from the US market because of earlier tariffs, including some levied by the Biden administration.
For years, Chinese companies have been moving their supply chains to other countries, particularly in south-east Asia, to circumvent US levies. Now those countries have also been hit with tariffs, with exports to the US from Vietnam subject to a 46% tax and those from Thailand subject to 37%.
The president of the European Chamber of Commerce in China, Jens Eskelund, said the tariffs would probably “impact certain elements in some of our members’ supply chains, while raising a great deal of uncertainty for many others”.
Trump also closed the so-called “de minimus” loophole that allowed low-value goods to be imported to the US-tariff free. Approximately 60% of these goods came from China, fuelling the rise of fast fashion and e-commerce companies such as Shein and Temu.
Among the countermeasures that China is expected to consider are devaluing its currency, reciprocal tariffs and restricting the export of certain critical minerals. China has already banned the export of gallium, germanium and antimony to the US, citing their potential military applications.
But each of these measures has downsides, said Michael Pettis, a professor of finance at Peking University.
“If you reduce the export of critical minerals, you have to reduce the domestic production of those critical minerals, which means putting workers out of business,” Pettis said. “If you depreciate your currency in response to American tariffs, you’re not [just] punishing the US, you’re punishing all your trade partners.”
Yeling Tan, a professor of public policy at the Blavatnik School of Government at the University of Oxford, said: “The Chinese government has denounced the US’s latest tariffs, but stopped short of immediate retaliation. This signals that Beijing is leaving room for a deal to be struck before tariffs take effect on 9 April.
“China now faces a delicate balancing act. Retaliation might harm efforts to stimulate an already weak domestic economy, and risks deterring the very foreign investment China hopes to attract.”
