China responds to Trump's tariffs – a high-stakes game

The US’s new tariffs on China and several other countries have triggered a chain reaction in the global trading system. President Donald Trump has imposed heavy tariffs, arguing that the US must be protected from “unfair trading conditions.” But the response from China came quickly – and clearly. At the same time, several other countries are maneuvering to protect their interests, including Thailand.

US trade with China in numbers:

• The US exports 7.1% of its goods to China
• The US imports 14% of its goods from China

China responds with strong countermeasures

Now China is responding with additional tariffs of 34 percent on all imports from the United States. In addition, export restrictions are being imposed on critical earth metals and several American companies are being placed on a list of “unreliable entities.” China has also suspended imports of certain American agricultural goods, which directly affects the American agricultural sector.

Chinese authorities dismissed Trump's move as "unilateral economic bullying" and a violation of The World Trade Organization (WTO) rules. WTO was formed precisely for the purpose of preventing and resolving international trade disputes and reducing trade barriers. The organization has historically played a key role in creating a functioning global trading system and preventing the escalation of conflicts between member states.

The TikTok deal also became a clear example of the political game: shortly after Trump presented the new tariffs, Beijing announced that it would not approve any sales of TikTok to American players, which effectively stopped the deal.

Historical parallels

This is not the first time China and the US have clashed over trade issues. During Trump's previous presidency from 2017 to 2021, a series of tariffs were imposed on both sides. The conflict culminated in 2018 to 2019 with tariffs of hundreds of billions of dollars in both directions. The truce only came in 2020 through a partial trade agreement, but many of the tariffs remained.

Thailand and other Southeast Asian countries seek dialogue

Several of the new US tariffs affect not only China but also allies and trading partners in Asia. Vietnam, Thailand, Indonesia and the Philippines have all seen tariffs of 32-49 percent imposed on their goods.

Vietnam has requested urgent talks with Washington, and Thailand, under Prime Minister Paetongtarn Shinawatra, is preparing delegations to negotiate a reduction. It is considering increasing imports from the United States and lowering its own tariffs to ease the pressure.

Countries choose different paths – from dialogue to concessions

Several countries have chosen different strategies to deal with Trump's tariffs – some seek active dialogue and diplomacy, others offer unilateral concessions in the hope of being exempted from the tariffs.

Countries that have chosen diplomacy or a wait-and-see attitude:

• Indonesia: Has officially announced that it will not impose retaliatory tariffs but will instead focus on diplomacy and negotiations.
• Philippines: Has not flagged any countermeasures despite the country being a major exporter of electronics and semiconductors. Instead, the need for regional cooperation and dialogue is emphasized.
• Malaysia: Has clearly declared that no retaliatory tariffs are planned, without holding talks with the US.
• India: Has so far kept a low profile and is awaiting the moves of larger players, especially from the EU.

Countries offering concessions to avoid tariffs:

• Vietnam: Even before Trump's April announcement, Hanoi lowered tariffs on certain imported goods and promised to increase imports from the United States, including aircraft and agricultural goods.
• Thailand: Plans to increase imports from the US and lower own tariffs on selected American goods. Discussions are underway to eliminate import duties on beef and alcohol, and increase purchases of corn, soy, natural gas and chemicals.
• Taiwan: Has declared that it will not respond with any counter-sanctions. Instead, President Lai Ching-te announced that the country will eliminate its own trade barriers against the US and encourage domestic companies to invest in the US market.

The EU's balancing act

The EU is trying to combine negotiation and agreement with readiness for countermeasures. The Union has reported the US to the WTO for violating the rules and is preparing its own tariffs on American products. An official proposal was presented on April 7. The background is that Trump has imposed tariffs of 20 percent on EU exports, as well as increased fees on steel, aluminum and cars. In response, the EU is planning punitive tariffs on American products such as bourbon, meat, cereals and dental floss – while opening up for negotiations. A “proportionate” countermeasure is expected from mid-April.

Conclusion

The situation is similar to previous trade conflicts, but now more players are on the playing field. China's response is more strategic, and countries like Thailand and Vietnam are trying to navigate between major powers with the economy first. At the same time, export-dependent industries around the world – from Europe to Asia and even within the United States – risk being hit hard as trade flows are disrupted and the investment climate deteriorates.

In light of this, one might ask whether it would not have been wiser to first try to resolve trade issues within the framework of the World Trade Organization. The WTO is precisely there to handle disputes and prevent them from escalating into broad trade wars. The path chosen now risks creating prolonged uncertainty, severe market turmoil and extensive damage to the global economy.

Sources: Reuters, Bloomberg, Financial Times, BBC, South China Morning Post, The Washington Post (April 2025)

Artiklar report

• Hands off: Protests against Trump's tariffs and cuts
• US tariffs threaten Thailand's exports
• Trump and the pattern of sudden price changes
• Trump shocks with new tariffs – decisions without coordination
• Tariffs backfire – America's own companies are affected
• Thailand's response to US tariffs – Paetongtarn takes action
• Trump's statements shake the market - stock market falls after tariff announcement
• US tariffs of 90 percent are being questioned – lack of transparency
• Southeast Asia responds – strong criticism of the new US tariffs
• US tariffs hit Southeast Asian countries hard

Text: The editorial staff

Image license: The White House, Wikimedia, original image