China’s Resolute Response to US Tariff War

In the face of the US-initiated tariff war, China has been taking a series of measured and resolute actions to safeguard its economic interests and the stability of the global trade order.​

The Chinese government has made its stance clear. As the US government announced “reciprocal tariffs” on all trading partners, the Chinese side firmly condemned such actions. The Ministry of Foreign Affairs stated that the US, under the guise of “reciprocity,” is actually practicing hegemony, sacrificing the legitimate interests of all countries for its own self-interest and placing “America First” above international rules. This is a typical act of unilateralism, protectionism, and economic bullying. China has released “The Position of the Chinese Government on Opposing the US Abuse of Tariffs,” clearly showing its solemn attitude.​

To help domestic enterprises mit​

igat the impact of the US tariff measures, China has implemented a variety of policies. Given that China is the world’s largest trading nation of intermediate goods and has deeply integrated into the global industrial and supply chain system, many domestic enterprises are both importers and exporters. To this end, China plans to increase support for intermediate goods trade, aiming to reduce the cost of intermediate goods trade. This will enable enterprises to better cope with external shocks, whether direct or indirect.​

In the medium and long term, China will make full use of existing multilateral and bilateral free trade systems and trade agreements. For example, with the implementation of the Regional Comprehensive Economic Partnership (RCEP), relevant enterprises and government departments are encouraged to make full use of the rules of origin and a series of trade preferential measures to reduce costs and bypass the interference of current trade barriers, thus promoting regional economic integration. The government is also vigorously promoting a diversified foreign trade strategy, actively negotiating and signing multilateral and bilateral free trade agreements with more countries, and taking advantage of free trade agreements, including zero-tariff arrangements, to reduce the impact of the trade war.​

Service trade and digital trade are emerging as new growth points for China’s foreign trade. In recent years, service trade, especially digital trade, has become a new driving force and engine for global trade growth. In the past decade, China’s service trade has grown at an average annual rate of 6%, much higher than the global average. Knowledge-intensive services, in particular, have accounted for 40% of the overall service industry. With the accelerating digital transformation, China’s digital trade has also become a new growth driver. In the past five years, China’s digital trade has almost doubled. The rapid development of digital technologies such as cloud computing, artificial intelligence, and big data, as well as digital services such as online medical care and distance education, has provided strong impetus for the growth of overall trade. The Chinese government has also issued “Opinions on the Reform, Innovation, and Development of Digital Trade,” providing fundamental guidance and strategic direction for building a digital trade powerhouse in the future.​

In addition, China is committed to expanding the domestic unified market and stimulating domestic demand. In an era of global trade protectionism and anti-globalization, the market is a scarce resource, and an open market is even rarer. The US has been able to wield the tariff stick precisely because of the scale and attractiveness of its domestic market. For China, cultivating a unified domestic market and a more robust domestic demand market is the fundamental way to deal with the tariff war and trade protection. In recent years, China has been actively promoting the construction of a unified domestic market, aiming to release the vitality of domestic demand and market resources and attract more high-end global factors and resources.​

Finally, China adheres to high-level opening up and expanding domestic demand. The global economy is an integrated whole, and China’s domestic demand is also the external demand of other countries. By promoting a strong domestic demand market and an internal demand strategy, China provides a more stable growth impetus and source for the global economy. In recent years, China has been actively promoting the expansion of domestic demand as an important pillar and key driving force for building a new development pattern. At the same time, China is also promoting high-level institutional opening up, which is highly attractive for attracting foreign investment and global high-end factors and resources. In the future, China will focus on market access and other aspects to promote a new round of high-level opening up, creating a more attractive business environment and a favorable external environment for other countries.​

In conclusion, China is responding to the US tariff war with a comprehensive set of strategies, demonstrating its responsibility as a major economy and its determination to safeguard the multilateral trading system.e