Staff Report
Beijing delays retaliation as tensions rise over Trump’s aggressive trade moves
China has opted not to respond immediately to the latest surge in U.S. tariffs, marking a notable shift from its past strategy of swift countermeasures.
Hours after the U.S. raised total tariffs on Chinese imports to 104%, there was no official word from Beijing on any reciprocal action. In contrast, earlier rounds of tariff hikes were met with near-instant reactions from multiple Chinese ministries.
Instead of a tit-for-tat escalation, Chinese officials released a comprehensive policy paper around 3 p.m. local time, outlining the country’s approach to U.S. trade relations. The document emphasized China’s commitment to the original Phase One trade agreement and focused heavily on the “mutually beneficial” nature of U.S.-China ties.
Accompanying the white paper, a Q&A briefing from the Ministry of Commerce reiterated China’s openness to negotiations—but also carried a stern warning. Officials stated that China “has both the resolve and the capacity to respond firmly,” cautioning that Washington should prepare for the consequences of its actions.
The trade standoff between the two economic giants has intensified since President Donald Trump returned to office in January. Despite the deepening rift, the two leaders have yet to hold a formal conversation since Trump’s re-election.
The lack of an immediate Chinese response provided a momentary reprieve for markets, which had been reeling from escalating tensions. Chinese stocks rebounded slightly, with indexes in both Hong Kong and the mainland recovering after earlier losses.
Analysts suggest that Beijing’s restraint may reflect a strategic pause. China had already responded to a previous U.S. tariff increase with a blanket 34% duty. However, with Washington adding another 50% on top of that, the next move may require a more measured response.
Sources say top Chinese leaders are expected to meet this week to consider economic support measures aimed at bolstering domestic consumption and stabilizing financial markets in the face of U.S. pressure.
Beyond tariff responses, China has a wide array of tools at its disposal. Last week, it launched an investigation into a major U.S. firm and added several American companies to its restricted “entity list,” limiting their ability to do business in China. Export licenses on key rare earth minerals have also been tightened, with more restrictions potentially on the way.
China could escalate further by restricting U.S. access to critical materials or halting imports of American agricultural products like poultry. There’s also speculation about China reducing cooperation on narcotics control, particularly regarding fentanyl, which the U.S. has linked to tariff decisions.
Other potential measures include adjusting the value of the yuan to boost export competitiveness or trimming its massive holdings of U.S. government bonds—moves that could carry risks for China as well.
Still, Beijing’s official stance remains cautiously optimistic. The closing section of the policy paper urged dialogue and cooperation, stating:
“No nation will sacrifice its legitimate development goals to satisfy another’s unreasonable demands. However, this does not prevent both sides from seeking common ground through respectful and equal dialogue.”
