The escalating trade war between the US and China has led Chinese economists to suggest that the Chinese authorities should strongly counter external pressures while maintaining dialogue mechanisms and accelerating the construction of an “international unified front”. Experts believe that building an international community relies on shared values in order to counter President Trump’s imposition of additional tariffs, making it nearly impossible for China to form a unified front internationally. Dialogue and communication between the US and China have become increasingly difficult.
On April 8th, the White House announced that the US will impose a 104% tariff on Chinese imports starting from 12:01 AM Eastern Time on Wednesday. This decision was made as Beijing failed to cancel retaliatory tariffs on US goods before the deadline set by President Trump at noon on Tuesday.
Previously, President Trump announced a reciprocal tariff policy where China would face a 34% tariff increase, effective on April 9th. In response, Beijing announced retaliatory measures, imposing a 34% tariff increase on US goods starting at 12:01 PM on the 10th.
According to Trump’s plan, the US will implement varying tariffs on different countries and regions, with China at 34%, the EU at 20%, Taiwan at 32%, Vietnam at 46%, Switzerland at 31%, the UK and Brazil at 10%, and Japan, South Korea, and India at 24%, 25%, and 26% respectively. Additionally, a minimum 10% tariff will be set on all goods entering the US.
An article by Luo Zhiheng, Chief Economist of Yuekai Securities, published in the “National Business Daily” on the 8th, proposed that the Chinese authorities should “construct an international unified front”. Luo Zhiheng put forward five suggestions to cope with Trump’s tariff war, including implementing more precise countermeasures, maintaining communication mechanisms to achieve phased agreements, focusing on building an international community of interest, and boosting domestic demand.
In response to the call for constructing an international community of interest, experts like Professor Wang Xiaosong from Renmin University of China and Chief Economist Xia Chun from Shangshan Capital suggested that Beijing should seize the opportunity to strengthen ties with Europe.
On the 8th, Chinese Premier Li Keqiang, in a phone call with European Commission President Von der Leyen, emphasized the need for enhanced communication and coordination between China and the EU to uphold free and open trade and investment.
European countries have not yet decided on their response to US tariffs. On April 7th, EU member states generally agreed that negotiations should be prioritized as a response to President Trump’s new tariffs rather than immediate retaliation.
Despite preparations for potential countermeasures, the EU faces limitations due to the asymmetrical trade scale with the US. In 2024, EU exports to the US amounted to €532 billion, while US exports to the EU were €334 billion.
Furthermore, the Chinese Foreign Ministry announced that Spanish Prime Minister Sánchez will visit China on the 10th and 11th to meet with President Xi Jinping and conduct talks with Premier Li Keqiang.
Concerning the suggestions to expand domestic demand, stabilize employment markets, and provide relief for export-related industries, Beijing is required to take concrete actions such as enhancing social welfare, lowering taxes, and improving legal protections for citizens to truly stimulate domestic demand.
Experts believe that Beijing’s aspirations to build a unified front to counter Trump’s tariffs are close to impossible due to the significant trade surplus China held in 2024 and its oversupply of products, which pose a threat globally. With the US as the largest market globally, it would be challenging for any economic entity to sever ties with the US or establish an economic barrier.
Amidst the economic backdrop of the tariff war, expanding domestic demand becomes even more unlikely. As China heavily relies on exports, efforts to stabilize export-related industries may face obstacles, especially if industrial chains start shifting away from China due to global de-sinicization efforts.
Moreover, China’s financial burden of providing substantial aid to Asian, African, and Latin American countries, as well as allies like Iran and North Korea, through generous investments may strain its economy further. Beijing’s ability to sustain industries without collapse could become increasingly challenging in the near future.