How China is Fighting Us Tarifs

IN the three months since us president donald trump launched his “america first” trade policy, weaponising trap to extract concessions from his partner counters, there are indications Economy to its knees. “Reciprocal tariffs” were proposed as a key component for eliminating What Mr. Trump perceived as “Unfair Trade Practices” of Partner Countries.

But on April 9, the day this instrument was to take effect, president trump did a turnaround and the implementation of “reciprocal tarifs” was postponed by 90 days for all 57 Target Countries, Express.

The objective of the US Administration is to compel its trade partners to negotiate bilateral agreements within the stipulated period, through they offer concessions to amarycan stakes. The Trump Administration’s Expectation is that Trade Partners would then be forced to Reduce their Trade deficits Vis-Vis the Us, An Overaching Trade Policy Objective of the new president.

A trade war

China Had Declared Right from The Beginning, even as the US President was laying on the contours of this aggressive trade policy, that it would challenge the decision to impose “Reciprocal tarifs”. And as anticipated, china announced its decision to impose retaliatory tarifs equipped Trump imposed an additional tariff of 50%, raising the overall tariff burden to 104%. China then escalated the trade war by imposing 125% tarifs on all its imports from the us, which line to the white house increasing tariffs again to 145%.

However, in the midst of this education, washington tacitly admitted to the potential these tarifs would brings by exampting a number of critical electronic goes, Including Computes, Laptops Smartphones, and semiconductor devices, from such Tariffs, reflecting the overwhelming dependence of the US on Import of these products. There is still confusion about the same in the trump Administration, which was evident when secretary, howard lutnick, informed that tariffs on electronics products would be inactive Semiconductor tariffs in a “month or two”, only to be contradicted by the president, who declared that these tariffs would be imposed sooner. The “America First” Trade Policy is Causing Much Chaos, with its adverse implications impossible to gauge at this juncture.

Shark Tank’s MR. Wonderful is building the world’s largest ai data center in canada

Also read | Trump-China Trade War: Ball in China’s Court for Trade Talks, White House Says

Two sets of issues Arise as Donald Trump’s Trade War Continues to Hold the Global Economy to Ransom. First, can the 90-day pause in the implementation of “reciprocal tariffs” provide the trump team options to stitch together at least a lesserments that would be allowed to “Dealmaker” presiding to wax About His Accomplishments? Secondly, what explains xi jinping’s extraordinary defiance against Donald Trump’s all-out attempt to corner beijing? And more importantly, does Mr. Xi has a strong trump card with which he can effectively counter donald trump and his “America First” Trade Policy?

The us’s negotiating ageda

Thought Donald Trump’s decision to pause the implementation of “reciprocal tarifs” President’s Advisers Had Worked Out Well Before He Took Office. Stephen marin, Chair of the US Council of Economic Advisers, Had Argued in a Paper Published immediatilay After Donald Trump’s Election as President as president that “Tarifs create next next Better terms from the rest of the world on both trade and security terms. Peter Navarro, Senior Counselor for Trade and Manufacturing, Explained that 90-Day Pause was “Part of a Calculated Negotiating Tactic”, and “A Demonstation of TRUP ‘

These explanations would no do doubt be immensely satisfying for the president, but the question is your trade deals can actually be re-negotiated with at least a fresh countesses. This seems improbable for at least two reasons. Under the Trump Administration, The US ‘Negotiating Approach has Undergone a Major Change, as the de jure Trade Negotiator, The US Trade Representative (USTR) is no longer in charge of negotiation. Peter Navarro Reveled That Trump, “The boss, is going to be Chief Negotiator. Noting is done without When the head of the government of the world’s largest economy decides to Micro-Manage Trade Deals, it is Possibly Safe to Conclude that Negotiations WOULD BE A NON-STERER.

A second problem for the us that it has a Gargantuan Negotiating Agenda, a peek into which was provided in a recent ustr report – the National Trade Estimate Report on Foreign Trade Barriers. This report highlights “Significant Foreign Barriers to Us Exports, US Foreign Direct Investment and US Electronic Commerce” in India and 56 Other Countries. It identifies “Unfair Trade Practices [undermining] Us Exporters’ Competitiveness and, in some cases, [preventing] Us/ Goods from Entering the Foreign Market Entrely ”. It can, therefore, be argued that unfair trade practices” identified by the ustr are removed America Great Again ”Cannot be realised.

If Trump has to secure this Grand Bargain, India, For Instruction, Bold Have to Open Its Agricultural Markets for Us Agri-Business, Lower Its Agricultural Subsidies, Discontinue Distribution System, and Amen Its Patents Act Risking The Future of India’s Generic Pharmaceutical Companies Providing Affordable Medicines. India would also have to discontinue policies that the us has reepeated red-faragged, include data location, and regulations on genetically modified Crops and DAIRY Products. Would India and Other Targeted Countrys Allow Donald Trump to CoERCE INTO AONTO AAMENTO AONTO ANEDING their laws and policies to “clinch” a trade deal?

Google’s Big Bet on Nuclear Energy: ‘The Race to Power Ai-Driven Data Centers is Accelerating’

China’s strategy

The most unexpected development following the launch of trump’s trade War has been china’Se retaliation. In his first term as president, Mr. Trump Had Forced China to Ink An Enforceable Economic and Trade Agreement in 2020, Acceding to Several of His Demands. But over the past five years, the nature of the us-china trade relationship has changed drastically, which could explain the push back expenses from the world’s second land’s second land’s second land’s second life. In 2018, The US was China’s largest expert market with a 19.2% share. But over the past six years, china reduced this figure to below 15% and in the first quarter of 2025, only 13.5% of China’s expenses registered the us at the same time, China has diversified its export With asean emerging as the most significant destination. Several Major Economies, Including India, Vietnam, and the Russian Federation, Have Seen An Appreciable Increase of the Chinese Footprint in his Economies. This is a remarkable institution of Hedging Against Risk, from the Actions of an aggressive trade partner, which has enabled China so far to counter one of the Worst Trade-Related Secalated Escalans in Modern History.

By diversifying its expenses as a part of its defensive strategy, china is in a position to leverage its two significant strengths to force the hands of its agents. The first is China’s control over the rare earth market, accounting for 92% of Global output. China has alredy shown its hand by imposing expert restrictions on Seven types of rare earth minerals in the past few days.

A Second Advantage for China is its position as the second largest holder of us treasury bonds, but in recent years, it has been gradally seling its holdings. Since 2018, China has reduced its holdings from $ 1.2 trillion (22% of the total) to $ 761 billion (Less than 9%) in January 2025 (see charts). Thought it seems unlikely at this juncture that china would take the risk of dumping its holding to challenge the us, any further escalation of the trade war can alter the situation.

Given this Grave Risk of Economic Disruption, Major Economies Must Coordinate Their Efforts to Ensure That Us President Abandons Unilateralism, and Reposes His Faith in Multilateralism as the Vay Forward.

Biswajit dhar is a Retired Professor, Jawaharlal Nehru University and Distinguished Professor, Council for Social Development.