Escalating Trade War Between the US and China
China has urged the United States to immediately withdraw its newly imposed tariffs, warning that it will take countermeasures to protect its economic interests. The latest round of tariffs, announced by President Donald Trump, imposes a 34% levy on Chinese imports—on top of an earlier 20% duty—bringing the total tariff rate to 54%. This move has intensified tensions between the world’s two largest economies, potentially disrupting global supply chains and pushing international markets toward greater volatility.
China’s Commerce Ministry condemned the US decision, calling it a violation of the balance achieved through past trade negotiations. The ministry emphasized that Washington has historically benefited from global trade and accused the US of disregarding established trade agreements. The growing rift between the two nations raises concerns about retaliatory actions from Beijing that could further destabilize international trade relations.
The US has imposed a 54% total tariff on Chinese imports.
China has vowed countermeasures to protect its trade interests.
Trade experts fear disruption to global supply chains and rising economic uncertainty.
US Closes Trade Loophole, Targets Chinese Online Retailers
As part of his broader trade crackdown, Trump signed an executive order closing the “de minimis” loophole, which previously allowed low-value packages from China and Hong Kong to enter the US duty-free. This exemption had enabled companies such as Shein and Temu to ship products directly to American consumers at lower costs, avoiding import duties that domestic retailers were required to pay.
The decision to eliminate this provision aligns with Trump’s broader strategy to curb Chinese imports, which he has repeatedly labeled as unfair competition. The move could significantly impact China’s e-commerce exports to the US, forcing Chinese firms to either absorb higher costs or shift focus to alternative markets.
Trump closed the “de minimis” loophole, affecting low-value Chinese imports.
E-commerce platforms like Shein and Temu may face increased operational costs.
The decision could push Chinese exporters to explore alternative markets.
China’s Trade with the US and the 2020 Trade Agreement
Before the US-China trade war began, Beijing purchased $154 billion worth of American goods in 2017, a figure that rose to $164 billion in 2024, according to Chinese customs data. Under the “Phase 1” trade agreement signed in 2020, China had committed to increasing purchases of US goods by $200 billion over two years. However, Beijing failed to meet those targets, citing disruptions caused by the COVID-19 pandemic.
Trump had set an April 1 deadline for the US Trade Representative to assess whether China had upheld its trade commitments. The decision to impose fresh tariffs signals Washington’s dissatisfaction with Beijing’s compliance, escalating the ongoing trade conflict.
China’s purchases of US goods reached $164 billion in 2024.
The 2020 trade agreement required China to boost imports by $200 billion.
The US deemed China non-compliant and responded with higher tariffs.
China’s Response and Global Economic Impact
Chinese officials have warned that they will take all necessary measures to counteract the US tariffs, but analysts suggest that Beijing’s response will be measured to avoid deepening economic instability. The European Union Chamber of Commerce in China noted that many companies had already adjusted their supply chains to reduce exposure to US-China trade tensions, but sudden restructuring would not be feasible.
Chinese manufacturers have increasingly adopted the “China+1” strategy, diversifying production to countries such as Vietnam, Mexico, and Malaysia to mitigate risks. However, with Vietnam and Mexico now facing tariffs of 46% and 24%, respectively, the economic benefits of shifting production out of China have diminished.
China has pledged to take countermeasures against US tariffs.
Many firms have diversified supply chains but face new US restrictions.
Tariffs on Vietnam and Mexico reduce the appeal of relocating production.
Beijing’s Economic Strategy and Potential Retaliation
China has maintained its annual economic growth target at around 5%, despite the new US trade restrictions. The government has pledged additional fiscal stimulus, increased debt issuance, and monetary easing to counter the impact of the tariffs. Officials also aim to boost domestic demand to sustain economic recovery following the COVID-19 pandemic.
Economic analysts suggest that China anticipated these tariff hikes and has held back stronger stimulus measures to deploy if the trade war escalates further. Beijing’s next move remains uncertain, but retaliation against US goods or restrictions on American companies operating in China remain possible.
China is maintaining its 5% economic growth target despite tariffs.
The government is preparing additional fiscal and monetary stimulus measures.
Possible retaliation includes restrictions on US firms operating in China.
US-China Trade Standoff and Possible Leadership Talks
As tensions escalate, speculation is growing over whether President Trump and Chinese President Xi Jinping will meet for direct talks. Reports indicate that a potential meeting could take place in June in the United States. However, political analysts believe both leaders are reluctant to appear as if they are making concessions.
Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, explained that Trump’s strategy combines maximum pressure with sudden diplomatic openings. Meanwhile, Xi has historically favored a methodical and cautious approach, relying on discipline and patience. The risk of miscalculation remains high, as prolonged standoffs could worsen economic instability for both nations.
Trump and Xi may meet in June for trade discussions.
Both leaders face pressure to avoid appearing weak in negotiations.
A prolonged trade standoff could increase economic uncertainty globally.
