How China May Respond to New US Tariffs Starting April 2

Five years since President Xi Jinping signed his first trade agreement with Donald Trump, officials are set to voice their opinions on China’s compliance with the deal during a high-stakes week that could escalate tensions. American officials have until today (April 1, 2025) to submit a biannual review of the ‘Phase One’ agreement, which committed China to buy an additional $200 billion worth of American goods—a target missed according to official data, as reported by Bloomberg. Trade chiefs will also evaluate other bilateral issues, such as whether the U.S. should revoke China’s normal trade relations status—a move economists liken to a 30% tariff. The review of Trump’s ‘America First’ trade policy could pave the way for talks about the future of a trade relationship valued at $690 billion last year. It is unclear if American officials will publish their findings online or present them directly to the White House, feeding future decisions on tariffs and policies. “Trump will likely handle the review as if holding an axe,” said He Weiwen, a former trade counselor in Chinese diplomatic missions in New York and San Francisco. “He will use the review results as a threat to impose more tariffs on China.” Revoking China’s permanent normal trade relations could be enough to ‘kill trade,’ He added. This review is just one of many decisions looming that could shape U.S.-China relations. Just 24 hours after the report submission—on ‘Liberation Day’—Trump plans to release proposals for so-called reciprocal tariffs on U.S. partners, potentially including China. On Saturday (April 5, 2025), ByteDance faces a deadline to reach a deal selling TikTok to an American company due to national security concerns. This dynamic week might conclude with either a ceasefire-like agreement or a full-scale trade war.