CNN Analysis: How Beijing will respond to Trump’s tariffs and what future of US-China relations

He said it and did it by the president of the United States and started the trade war with Mexico, Canada and also with , imposing from Saturday (01.02.2025) duties 25% on imports of products from Canada and Mexico and additional 10% on existing duties on Chinese products imported into the US. The EU is next. With this move Donald Trump attacks the top three US, Mexico, Canada and China trading partners, which cumulatively account for over 40% of imports to the country marking a new phase of tension in international trade relations. The main question now is how Beijing will respond to Trump’s tariffs and what the future of US-China relations will be. CORVERSE Unlike Mexico and Canada, who reacted directly by announcing retaliation, China is currently holding a stand for waiting, notes in an analysis of it. The country’s Ministry of Commerce condemned Washington’s decision, speaking of violating the rules of the World Trade Organization (WTO) and heralding “anti-measures”, but not clarifying their form. At the same time, emphasising that the US decision is a unilateral action that violates international trade rules. Three factors explain Beijing’s waiting strategy China’s waiting position stems from a combination of factors. The first is the political framework in which this development takes place. CORVERSE Trump’s second term began with unexpectedly warm relations with Beijing. a few days before the latter’s inauguration, with Trump talking about a “very good conversation”. Furthermore, China sent to the inauguration ceremony the highest-level official that has ever attended a corresponding occasion. At the same time, the Chinese leadership seems to appreciate that Trump does not want to escalate commercial tensions at this stage, after having repeatedly stated his intention to work with Beijing to tackle the war in Ukraine, while in a recent interview with Fox News he suggested that the two countries could reach a trade agreement. Another factor that explains China’s attitude is the nature of the new tariffs. 10% imposed by Trump is significantly less than 60% promised by the election. In addition, Washington did not justify the duties on the basis of the trade deficit – as happened in 2018 – but linked them to the role of Chinese companies in the trafficking of fentanyl, a synthetic opioid responsible for the drug crisis in the US. The danger of trade war and Beijing’s choices China’s… waiting attitude, however, may change in the next period, especially if the U.S. goes further. Analysts in China consider it possible Trump would use the new tariffs as a bargaining chip, trying to extract concessions from Beijing before moving on to tougher measures. A scenario that is not excluded is to ask China for more control measures in dealing with fentanyl in exchange for a reduction in customs duties. However, if China decides to move on to countermeasures, it has several options. In the past, it had imposed duties on American agricultural products and industrial goods, causing serious effects on critical sectors of the American economy. In addition, China has strengthened its regulatory framework by imposing controls on exports of rare earths – critical materials for the manufacture of electronic devices and military equipment. At the same time, Beijing has already restricted its dependence on the US. Chinese GDP is based only 3% on exports to the American market, while China has expanded its trade network to other countries, reducing its report to Washington. The future of US-China relations Although Beijing is keeping low-key for now, the question is for how long? The US has shown that they will not hesitate to escalate pressure if they consider that China does not meet their requirements. China for its part seems to invest in diplomacy and project itself as a responsible player on the international stage, contrary to Washington’s unilateral movements. If Washington continues to increase pressure, China may abandon the waiting strategy and respond with full commercial retaliation a, opening a new round of confrontation between the world’s two largest economies.