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 By Joe Cash, Xiuhao Chen, and Liz Lee


 BEIJING ("DIWIDA") - China demanded of the United States on Thursday to promptly revoke its newest round of tariffs and promised retaliatory measures to protect its interests following President Donald Trump’s announcement of extensive duties on every American trade partner globally.


 According to a statement by the Chinese commerce ministry, the U.S. action ignores the equilibrium of interests established through decades of multilateral trade talks and overlooks how significantly it has profited from global trade.


 "The ministry stated that China strongly disagrees with this and will implement retaliatory measures to protect its rights and interests." The statement comes as the two biggest economic powers seem poised to escalate their conflict, potentially disrupting worldwide supply networks.


 On Wednesday, Trump declared that China would face an additional 34% tariff, atop the 20% he had previously introduced earlier in the year, which escalates the overall new duties to 54%, nearing the 60% level he had warned about during his campaign.


 As with businesses from every other economy, Chinese exporters will encounter a 10% base tariff as part of the new 34% duty imposed on nearly all products sent to the world’s biggest consumer market starting this Saturday. The more substantial “reciprocal tariffs” will then be implemented from April 9th onwards.


 Trump also signed an executive order closing a trade loophole known as "de minimis" that has allowed low-value packages from China and Hong Kong to enter the U.S. duty free.


 WORLDWIDE TARIFFS


 "President Trump's tariffs elsewhere could create significant problems," according to Ruby Osman, a China specialist at the Tony Blair Institute for Global Change.


 Chinese companies have been redirecting trade through locations such as Vietnam and Mexico to bypass U.S. sanctions; however, these markets are now facing substantial tariffs themselves.


 "China+1" strategies caught on among Chinese exporters and multinational companies that had made the production powerhouse central to their supply chains during Trump's first term, but with India, Mexico, Vietnam and Malaysia - the countries that benefited most from this shift - facing tariffs of between 36% to 25%, the cost advantage of relocating manufacturing out of China is significantly diminished.


 Trump's tariffs could encourage China to step up its trade with alternative markets, but no other country currently comes even close to U.S. consumption power, where Chinese producers sell more than $400 billion worth of goods annually.


 "The imposition of tariffs by Trump surely won’t be beneficial for Chinese companies and could lead to significant distress in certain industries; however, these measures aren't likely to leave an indelible impression on the broader Chinese economy,” stated William Hurst, who holds the position of Chong Hua Professor of Chinese Development at the University of Cambridge.


 "The significance of U.S. exports to China is decreasing. The new American tariffs will likely encourage increased Chinese trade with various regions including Europe, Southeast Asia, and Africa," he noted.


 However, Chinese manufacturers have characterized moving to alternate markets as a " rat race," leading to pricing battles amongst exporters. This situation has the potential to exacerbate deflationary pressures in the world’s second-largest economy, as companies keep compressing their narrowing profit margins.


 China has kept its economic target for this year unchanged at "around 5%" despite Trump's tariff salvos which could call time on a largely export-led recovery underway since the end of the COVID-19 pandemic.


 The administration has committed additional fiscal stimulus, expanded debt offerings, deeper monetary ease, and placed heightened focus on stimulating local consumption to mitigate the effects of the trade conflict.


 Osman mentioned that "China had been anticipating this situation for quite some time. The comparatively moderate stimulus announcements during the Two Sessions in March were a strategic decision rather than an omission." He was alluding to China's yearly legislative gatherings known as the Two Sessions.


 She further noted that Beijing has deliberately maintained larger reserves in both domestic stimulus initiatives and countermeasures to use them more assertively if needed.


 China's President Xi Jinping may join the discussion as well, given reports suggesting both leaders might convene for a meeting in June in the U.S.


 Craig Singleton, a senior fellow at the Washington-based think tank Foundation for Defense of Democracies, stated that Trump and Xi find themselves in a bind characterized by mutual pressure and national pride.


 " Trump's approach combines intense pressure with unexpected diplomatic gestures—he views leverage and engagement as mutually supportive strategies. In contrast, Xi proceeds cautiously and avoids risks, depending instead on postponement and strict control. However, the challenge lies in this: should he choose not to engage, the pressure intensifies; yet engaging prematurely could make him appear vulnerable," he explained.


 "Neither wants to be seen as folding first, but delay could deepen the standoff."


 (Liz Lee, Ella Cao, Jing Wang, Joe Cash, and Xiuhao Chen contributed reporting; edited by Kim Coghill and Michael Perry)

China Demands Immediate Tariff Rollback from U.S., Threatens Retaliation

Unknown business, government, international relations, news, u.s. china relations

By Joe Cash, Xiuhao Chen, and Liz Lee BEIJING ("DIWIDA") - China demanded of the United States on Thursday to promptly revoke its newest round of tariffs and promised retaliatory measures to protec…

It's now up to Beijing to demonstrate 'geopolitical generosity' when dealing with contentious matters such as the South China Sea, according to a Malaysia-based international relations specialist.

 Beijing can take advantage of the doubt arising from Washington to attract Southeast Asia by demonstrating "geopolitical generosity" on sensitive matters including the
 <a href="https://www.scmp.com/topics/south-china-sea" title="">
 South China Sea
 </a>
 , according to a Malaysian international affairs expert.


 Mohd Faiz Abdullah, who serves as the chairman of the Institute of Strategic and International Studies Malaysia—a think tank that provides advice to the Malaysian government—also mentioned that should Southeast Asia face "damaging" trade policies from the United States, the region might be compelled to rely more heavily on China.


 Following his comeback to the White House, the US President has taken several significant actions.
 <a href="https://www.scmp.com/topics/donald-trump" title="">
 Donald Trump
 </a>
 These policies, which include tariffs, have introduced considerable ambiguity and appear to be disrupting the rule-based international order. In contrast, China has aimed to position itself as a stabilizing influence and a reliable major player on the world stage.


 Are you looking for insights into the most significant issues and developments globally? Find your answers here.
 <a href="https://www.scmp.com/knowledge">
 SCMP Knowledge
 </a>
 Our updated platform features handpicked content including explainers, FAQs, analyses, and infographics, all provided by our prestigious award-winning team.


 Mohd Faiz states that under the Trump administration, there was a move away from multipolarity, which he believes presented an ideal opportunity for Beijing to strengthen relationships with nations within its region.


 “If you ask me, now is the moment when China needs to truly step up its efforts and show more restraint while being more considerate regarding geopolitical issues—such as those concerning the South China Sea,” he stated during an interview on Wednesday at the margins of the event.
 <a href="https://www.scmp.com/topics/boao-forum-asia" title="">
 Boao Forum for Asia
 </a>
 in China's Hainan province.


 "China must be seen to be much more accommodating to Asean states and it must, in fact, go beyond geoeconomic strategies," he said, referring to the
 <a href="https://www.scmp.com/topics/asean" title="">
 ASEAN (Association of Southeast Asian Nations)
 </a>
 That could truly gain supporters who might still be undecided.

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 China has solidified its role as the leading trade ally for the area; however, it has ongoing disagreements with multiple nations—most notably with the Philippines—over conflicting territorial assertions in the South China Sea. Beijing asserts nearly full sovereignty over this vital maritime zone.


 Mohd Faiz, who is also the founding dean of the Selangor Business School, stated that this moment calls for China to embrace inclusivity and focus on giving rather than taking. He further emphasized that Beijing needs to acknowledge the strategic significance of ASEAN.


 "China might seize the opportunity when conditions are favorable... Trump is essentially providing them with a great chance here," he stated.


 Trump's unconventional take on foreign policy, including his views on alliances, has contributed to a nervousness in Southeast Asia over how his administration will approach the region. It has also raised the question of whether, in the case of an intensified US-China competition, Trump would put pressure on countries that have closer ties with Beijing.


 Many nations across Southeast Asia, such as Malaysia, maintain strong connections with both Washington and Beijing, and they have explicitly stated their desire not to be compelled into picking sides within this great power contest.


 Malaysian Prime Minister
 <a href="https://www.scmp.com/topics/anwar-ibrahim" title="">
 Anwar Ibrahim
 </a>
 Since assuming office in 2022, he has traveled to China thrice, and the trade between the two nations reached an all-time high last year, indicating their relationship was at its peak, as stated by Mohd Faiz.


 Malaysia also maintains strong economic connections with Washington, and he emphasized that "there’s no cause for us to move away from the US, nor is there any need to feel apologetic about strengthening our relationship with China."


 If the Trump administration pressures Malaysia to choose between countries, like by cutting back on trade with China, Mohd Faiz indicated that it would depend on what compromises the United States was prepared to offer. However, he also noted that this kind of deal would have its limits.


 "We must not appear to be making extraordinary efforts merely to follow America’s lead. This approach will be viewed as strictly practical and driven by the necessity of economic survival," he stated.


 Although Malaysia hasn't experienced similar pressures from Trump so far, Mohd Faiz noted that the "threat of tariffs looms," adding that this issue has been addressed by key departments within the Malaysian administration.


 He emphasized that the 10-member ASEAN should collectively present a united front amid uncertainties stemming from Washington’s actions. He cautioned that “if pushed too far and forced into a tight spot by the United States, we might be compelled to rely more heavily on China” — although he didn’t foresee this situation developing rapidly.


 "The apprehension felt towards Malaysia and ASEAN will likely mirror the unease experienced globally regarding the Trump administration — the anxiety caused by this uncertainty," he stated.


 Here, you're dealing with a scenario where everything isn’t clearly defined, including the type of foreign policy Trump advocates for.

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 As Malaysia assumes the role of ASEAN chair this year, Mohd Faiz mentioned that the increased tensions in the South China Sea will be a key focus. He stated that Malaysia aims to “make progress” toward reaching a “collective understanding” on the issue.
 <a href="https://www.scmp.com/news/asia/southeast-asia/article/3294211/indonesia-keep-pushing-south-china-sea-code-conduct-expand-defence-ties" title="">
 code of conduct
 </a>
 for the waterway.


 Although officials have committed to finalizing the code of conduct negotiations by 2026, advancements have been sluggish. Analysts point out that disagreements among the involved parties—including whether the document should carry legal weight—are contributing factors to this delay.


 Mohd Faiz stated that expecting negotiations to conclude by the end of this year would be overly simplistic due to their multifaceted nature. However, he added that demonstrating steady advancement would indicate a genuine commitment towards resolving the matter.


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 The article initially appeared on the South China Morning Post (www.scmp.com), which is the premier source for news coverage of China and Asia.


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Amid Trump's Uncertainty, Is This the 'Best Time' for China to Gain Allies in Southeast Asia?

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