TLDR
- China warns countries against making trade deals with the US that harm Beijing’s interests, threatening retaliation
- The US is reportedly pressuring around 70 countries to limit dealings with China in exchange for tariff exemptions
- Japan’s Prime Minister Shigeru Ishiba expressed concerns about US trade demands, stating Japan will not concede everything
- Trump administration has imposed tariffs up to 145% on Chinese imports, with potential to reach 245% when combined with existing levies
- China has retaliated with 125% taxes on US products and vowed to “fight to the end” in the escalating trade war
China has issued a stern warning to countries negotiating trade deals with the United States, threatening retaliation if any agreements harm Beijing’s interests. This latest development further complicates global trade talks as nations find themselves caught between the world’s two largest economies.
On Monday, China’s Commerce Ministry stated that while it respects countries resolving economic differences with the US, it “firmly opposes any party reaching a deal at the expense of China’s interests.” The ministry warned that if such deals occur, “China will never accept it and will resolutely take countermeasures in a reciprocal manner.”
The warning comes amid reports that President Donald Trump wants to use ongoing trade negotiations with approximately 70 countries to pressure US trading partners to limit their dealings with China. This strategy puts many nations in the difficult position of potentially having to choose between maintaining good relations with either the US or China.
Global Nations Caught in the Middle
Japan appears to be pushing back against US demands in their trade talks. Despite Trump welcoming “big progress” in discussions last week, Japanese Prime Minister Shigeru Ishiba suggested that US negotiators may face resistance.
“If Japan concedes everything, we won’t be able to secure our national interest,” Ishiba told the Japanese parliament on Monday. He also expressed “grave concern” over inconsistencies between the 2019 US-Japan trade deal and Trump’s auto tariffs.
South Korea is set to begin its own trade negotiations with the US this week. Acting President Han Duck-soo has confirmed these talks will soon commence as the country seeks to avoid potential tariffs.
India faces a potential tariff rate of 26% if it fails to reach a trade agreement with the Trump administration. US Vice President JD Vance is expected to meet with Indian Prime Minister Narendra Modi during a visit to the country this week.
The Escalating Tariff Battle
Since returning to the White House in January, Trump has imposed heavy taxes on Chinese imports. These tariffs now reach up to 145% on some Chinese goods, with the US administration stating that when combined with existing tariffs, levies on certain products could hit 245%.
The US president has argued that import taxes will encourage American consumers to buy more domestically-made goods. He claims this will increase tax revenue and lead to major investments within the country.
Critics counter that bringing manufacturing back to the US is a complex process that could take decades. They warn the economy may struggle in the interim as costs rise for consumers and businesses.
China has not taken these measures lying down. Beijing has retaliated with a 125% tax on products from the US and has vowed to “fight to the end” in this trade dispute.
The Chinese state-controlled media has been vocal about the situation. An editorial in the China Daily warned the European Union against trying to “appease” the United States, echoing the Commerce Ministry’s recent statements.
“Appeasement cannot bring peace, and compromise cannot earn one respect,” a Chinese Commerce Ministry spokesperson said, underscoring Beijing’s tough stance.
For many countries, the choice between the US and China presents serious economic calculations. As Jesper Koll from Japanese online trading platform Monex Group noted: “About 20% of Japan’s profitability comes from the United States, about 15% comes from the People’s Republic of China. Certainly, Japan doesn’t want to have to choose between America and the People’s Republic of China.”
The trade war has already sent shockwaves through global financial markets. Earlier this month, stock markets experienced volatility as investors responded to the escalating tensions between the world’s two economic giants.
Trump has shown some flexibility in his approach. Hours after steep levies on dozens of America’s trading partners went into effect earlier this month, he announced a 90-day pause on those tariffs for all countries except China, responding to mounting opposition from politicians and market reactions.
As negotiations continue with various countries, the global trade landscape remains uncertain. Nations now face the challenging task of balancing their economic relationships with both the US and China, all while trying to protect their own interests in an increasingly divided trading environment.
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