The trade war between the United States and China has escalated, with the Chinese Communist Party increasingly isolated by the U.S. Some analysts believe that in the next 90 days, China is expected to use all means to rally other countries against the U.S., presenting these nations with choices, especially countries in Southeast Asia.
As of April 11th, U.S. tariffs on Chinese goods have increased to 145%, while China’s retaliatory tariffs on U.S. goods have reached 125%.
On April 2nd, U.S. President Trump announced tariff rates targeting 185 countries. This included a 10% “baseline” tariff on all products imported into the U.S., and higher “proportional” tariffs on approximately 60 countries with trade deficits.
Initially, the U.S. announced a 34% proportional tariff on China, excluding the additional tariffs imposed due to fentanyl issues, which was not the highest among all countries. However, on April 4th, the Chinese State Council announced a retaliatory 34% tariff on all U.S. imports.
Trump warned that if China did not withdraw its increased tariffs by April 8th, the U.S. would further increase tariffs on China by 50% starting the next day. Despite this warning, China disregarded it and imposed an additional 50% tariff on U.S. goods on April 9th.
Subsequently, on April 9th, Trump announced that tariffs on China would increase to 125%, effective immediately. The White House clarified the next day that this tariff rate only pertained to proportional levels and did not include the 20% tariff imposed on China for fentanyl issues, resulting in a total tariff of 145% on Chinese goods. On April 11th, China announced a 125% tariff on U.S. goods.
Meanwhile, Trump temporarily suspended proportional tariffs on other countries for 90 days, imposing only a 10% tariff during this period. He mentioned having contact with representatives from over 75 countries to negotiate issues including trade, trade barriers, tariffs, currency manipulation, and non-tariff barriers, and these countries did not retaliate against the U.S. in any way.
Trump’s global tariff announcement sparked controversy. Some analysts believe that China aimed to rally some countries against the U.S., openly challenging the U.S. However, after China’s strong countermeasures, no country followed suit.
The next 90 days will witness the next round of competition between China and the U.S.
Unwilling to accept its isolated status, the Chinese Communist Party swiftly decided to visit three Southeast Asian countries: Vietnam, Malaysia, and Cambodia. On April 11th, the Chinese Ministry of Foreign Affairs announced on its official website that Xi Jinping would visit Vietnam from April 14th to 15th, followed by visits to Malaysia and Cambodia from April 15th to 18th.
In the recent equal tariff rates announced by the White House, Southeast Asian countries generally faced higher rates. Cambodia at 49%; Laos at 48%; Vietnam at 46%; Myanmar at 44%; Thailand at 36%; Indonesia at 32%; Malaysia at 24%.
Associate Professor Chen Shimin from the Department of Political Science at National Taiwan University told Epoch Times on April 11th that for these Southeast Asian countries, they understand that many Chinese goods are disguised as originating from other countries to evade U.S. tariffs.
Following the outbreak of the U.S.-China trade war in 2018, numerous companies relocated some of their production capacity from China to Southeast Asia. However, many Chinese companies, after registering overseas, disguise Chinese-made goods as products originating from overseas through simple packaging or labeling and then export them to the U.S.
After Trump announced global equal tariffs, Vietnam was among the first countries to negotiate with the U.S. White House trade advisor Navarro mentioned that addressing the issue of “transhipment from China” was one of the U.S.’s major concerns. The Vietnamese government subsequently stated on its official website that it would crack down on “trade fraud” severely.
Chen Shimin believes that these Southeast Asian countries will negotiate with the U.S. during the 90-day buffer period and thoroughly inspect issues related to transhipment of Chinese goods. “Because for these countries, facing U.S. tariffs on these goods would cause significant harm to themselves.”
Chen Shimin emphasized that Southeast Asian countries face choices and must make decisions between China and the U.S. From a commercial standpoint, most countries are likely to choose the U.S. as they produce many goods and rely on consumer markets. China, being an export powerhouse, competes with them, making it difficult for them to sell products in the Chinese market to earn profits.
Furthermore, he mentioned that China still holds significant influence in countries like Myanmar and Cambodia, where China will undoubtedly use political, economic, and security relationships to influence them. It remains to be seen how these countries navigate these decisions in the coming months.
Apart from Southeast Asian countries, China has continued to reach out to other regions as well.
On April 10th, China’s Ambassador to Australia, Xiao Qian, published a signed article in the major Australian newspaper, “Sydney Morning Herald,” attempting to sow discord in U.S.-Australia relations while proposing cooperation with Australia against the U.S.
The article mentioned that the U.S. would impose a 10% tariff on Australia’s remote subantarctic islands, Heard Island and McDonald Islands, “not sparing even penguins.”
However, Australia’s Deputy Prime Minister and Minister for Defence, Richard Marles, promptly rejected Xiao Qian’s proposal, emphasizing Australia’s focus on diversifying trade and reducing reliance on China. Marles expressed to Sky News that Australia would not ally with China. “I can be very clear on that. We pursue Australia’s national interests. That is what we are doing.” He further stressed that Australia would prevent dumping as he feared China might seek to sell products in Australia at lower prices after facing difficulties in selling to the U.S.
On April 8th, Chinese Premier Li Keqiang spoke with EU Commission President Ursula von der Leyen, urging strengthened cooperation and criticizing U.S. tariff policies. However, von der Leyen expressed concerns about a potential influx of Chinese goods into the EU market and urged China not to escalate the tariff war with the U.S.
The published content of the call on the EU website showed von der Leyen emphasizing that as the world’s two largest markets, Europe and China have a responsibility to support a trade system “based on fair competition,” necessitating structural solutions to rebalance bilateral trade relations urgently.
She called for negotiations to resolve the current situation and avoid further escalation. Von der Leyen highlighted China’s crucial role in addressing potential trade shifts resulting from tariffs, especially in industries already affected by global oversupply. The two sides also discussed establishing mechanisms to track possible trade shifts.
Meanwhile, the EU extended a friendly gesture towards the U.S. While initially planning retaliatory measures against the U.S. steel and aluminum tariffs, the EU also deferred retaliatory actions for 90 days following Trump’s temporary suspension of equal tariffs. Trump considered the EU’s move “very wise.”
However, China maintains a tough stance against the U.S. A spokesperson for the Chinese Ministry of Commerce said on April 10th that China’s position remained unchanged, stating, “If you want to talk, the door is open; if you want to fight, we’ll fight to the end.”
Last year, the U.S. imported $440 billion worth of goods from China, while China only imported $145 billion worth of goods from the U.S., making it about three times more. When factoring in the substantial quantity of goods that China potentially exports to the U.S. through third-party factories and methods like transshipment, the impact on the Chinese economy could be significant if China refuses to compromise.
Estimates suggest that if the U.S. were to handle all Chinese goods with targeted measures, it could lead to a minimum 2% decline in China’s GDP, resulting in unemployment for more than 10 million people.
Chen Shimin also highlighted that the lack of a clear reaction in the Chinese stock market is due to the so-called “National Team” supporting it. He believed that the discontent among the Chinese populace towards the authorities would quickly surface.