Tensions are rising by the hour in Beijing regarding recent U.S. trade agreements that appear to target Chinese economic interests, just days before the expiration of a tariff freeze (July 9, 2025) announced three months ago. The concern stems from clauses included in previous U.S. agreements with the United Kingdom and Vietnam, which could potentially penalize Chinese companies.
According to reports from Handelsblatt, China’s leadership fears these agreements may serve as templates for future U.S. trade deals. In essence, Washington is reportedly planning trade pacts with a two-tier tariff system. Under this framework, the first tier would impose low tariffs on products genuinely produced within partner countries, while the second tier would apply significantly higher tariffs on goods containing components or value chains tied to other nations—effectively targeting China.
This means Beijing is concerned about indirect, secondary tariffs that could not only harm its economy but also push trade partners away over time. Recently, President Trump extended pressure on trading partners to finalize agreements before the deadline. A preliminary deal with Vietnam announced last week includes a 20% flat tariff on exports to the U.S., with an exception: goods originating from third countries but routed through Vietnam to avoid tariffs will face a punitive 40% rate—a move widely seen as targeting China.
Reports suggest more Chinese companies have been rerouting their exports to the U.S. via Vietnam. Exports from China to Vietnam have surged since mid-last year, followed by a corresponding increase in Vietnamese exports to the U.S., indicating that many Chinese firms are using Vietnam as a transit point to bypass U.S. tariffs.
Beijing has warned it will retaliate decisively if its interests are harmed. A spokesperson for China’s Ministry of Commerce stated that the Vietnam-U.S. agreement will be closely examined, and countermeasures will be taken if necessary. However, the Vietnam pact is not the only one indirectly aimed at China. A similar clause exists in the framework trade agreement reached between the U.S. and the UK in early May.
Under the U.S.-UK deal, Washington promised London lower tariffs on aluminum, automobiles, and pharmaceuticals—but only if supply chains and ownership structures comply with current and future U.S. security checks. These measures are likely intended to exclude Chinese companies from sensitive industrial supply chains. Beijing fears other countries might also be pressured into accepting such terms.
China’s embassy in the UK responded critically, warning it would oppose any agreement made at China’s expense. Meanwhile, negotiations between the U.S. and India reportedly include similar ‘rules of origin,’ requiring at least 60% of a product’s value to be created domestically to qualify for favorable tariffs.
Although relations between the U.S. and China have slightly improved—with Washington lifting some export restrictions on chip software, aircraft engines, and ethane—the broader trade tensions remain high. A recent agreement allows the U.S. to resume imports of rare earth minerals and permanent magnets from China in exchange for easing certain export controls.
Still, the ongoing U.S. trade negotiations with other countries threaten to undo even this modest progress. The 90-day tariff truce agreed upon in Geneva earlier this month expires on August 12. Previously, the U.S. had imposed retaliatory tariffs of up to 145% on Chinese imports, with China responding with tariffs up to 125%, along with export controls and actions against U.S. firms operating in China.
Meanwhile, there seems to be little progress between China and the EU. Beijing is reportedly scaling back a planned two-day summit with EU leaders to a single day, signaling dissatisfaction. This comes shortly after Chinese Foreign Minister Wang Yi’s visit to Brussels failed to yield meaningful outcomes.
The Chinese Ministry of Commerce announced new tariffs of 27.7% to 34.9% on brandy imports from the EU, further reflecting growing frustration. Experts like Da Wei from Tsinghua University say China is increasingly disappointed with the EU’s slow progress and its framing of bilateral ties through the lens of Russia’s war in Ukraine and China-Russia cooperation.
With the upcoming U.S. trade agreements raising alarms across Beijing, China appears to be preparing for both diplomatic and economic countermeasures.