It’s been less than a week since Trump’s Liberation Day statement. Since then the escalation of the trade war between the U.S. and China has surprised many. China’s response will undoubtedly shape the future of global trade as other countries watch China – U.S. tensions rise.
On Sunday a story appeared in the Chinese ‘People’s Daily’. It provides valuable insights for other countries and nations affected by tariffs. Importantly, it calls what the U.S. has done ‘abuse’.
The Abuse of Tariffs by the United States
In the story the author highlighted how the “sky will not fall” on China due to new tariffs. Words like ‘bullying’ are also used to describe the way the U.S. is behaving. It also suggests that China’s leadership anticipated tariffs. In fact, the Chinese were already preparing for a trade war at last year’s Central Economic Work Conference.
The story goes on to explain three main things that China has accomplished to limit the negative effect of tariffs on exports.
- China has reduced exports to the U.S. from 19.2 percent in 2018 to 14.7 percent in 2024. At the same time the Belt and Road Initiative and increased trade with ASEAN countries has grown from 16.4 percent to 47.8 percent of China’s exports
- The U.S. is still dependent on Chinese imports for its own products, reindustrialization will take time and the U.S. will still need to buy from China in the meantime.
- Most companies can rely on the large domestic market, nearly 85 percent of companies in China conduct domestic sales
Just think Huawei and what has happened to them. The company may have lost its ability to sell mobile phones in most countries around the world, but this hasn’t stopped it from taking on Nvidia.
What the article shows is that the Chinese economy can likely get over the trade tariffs. There is very little panic in the way that China has approached the trade war. In fact, like a sea, China is happy to accommodate the U.S. river that will eventually join the sea despite any temporary diversions.
JD Vance Versus China
JD Vance doesn’t like China. Last year he was quoted saying that he doesn’t “like that China has stolen a lot of American jobs.”
Last week the U.S. Vice-President spoke to Fox News about China. He stated how “we borrow money from Chinese peasants to buy things that Chinese peasants manufacture.” His comments went down like a lead balloon in China.
Today, China responded to Vance’s comments about “Chinese peasants.” And threw in how Vance himself comes from “hillbilly” country. Chinese Foreign Ministry spokesperson Lin Jian said: “It’s both astonishing and lamentable to hear this vice president make such ignorant and disrespectful remarks.”
Vance has been painted as a typical U.S. citizen amongst Chinese netizens today, “arrogant and rude as always.”
Much like we saw when President Zelensky visited the White House. JD Vance isn’t shy when it comes to his opinion. His latest comments won’t help any potential trade negotiations between Washington and Beijing.
China has vowed to “fight to the end” when it comes to tariffs. Can the U.S. look less like a bully and more like a partner in any negotiations going forward? On current form it can’t.
Author: Andy Samu
See Also:
Are Chinese Investors Bullish on Bitcoin? | Disruption Banking
Will Trump’s Liberation Day Cause a Stock Market Crash? | Disruption Banking
