China’s decision to hit back swiftly – rather than seek immediate negotiations – may signal a shift in strategy, said John Gong, Professor at the University of International Business and Economics in Beijing. “Beijing likely sees little room for meaningful talks or suspects Washington has no real interest in negotiating,” Gong said. “It’s also notable that China is the first among the affected countries to strike back, which could mark an escalation in the tariff war.” He said that the country had long expected a breakdown in economic ties and “prepared accordingly” while a “substantial decline in trade is no longer seen as a surprise”. Zhou Xiaoming, former Deputy Representative at China’s Permanent Mission to the UN Offices in Geneva said that while many countries worldwide opposed Trump’s approach but were too timid to act, China was taking a “leading” role in the global pushback against Trump's trade policies and in defending the multilateral trading system. China’s trade dependence on America has been declining in recent years as it has sought new export markets, while the weight of foreign trade in the Chinese economy has also been waning as it has looked to the domestic market to boost growth.
China has also put export controls on 16 American companies, barring Chinese companies from supplying them with dual-use items – goods that have both civilian and military applications. These 16 U.S. entities are involved in areas such as defense, aerospace, drone making, intelligence and logistics. The Coalition For A Prosperous America, an advocacy group championing trade-protectionist policies, is also among those blacklisted. Another 11 U.S. companies, including U.S. drone manufacturer Skydio, were put on the list of unreliable entities. China also tightened export controls on more rare earth products, a decision that will affect supply chains for aircraft and spacecraft, nuclear power, energy, medical equipment, laser devices, and other hi-tech industries. The controls cover the rare earths samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium and their alloys. Suppliers have to apply for government permission to export these products, and Chinese customs will be able to seize any goods suspected of containing undeclared restricted materials. China imposed similar export controls on the critical minerals gallium and germanium in July 2023; on tungsten, tellurium, bismuth, molybdenum and indium in February last year; and on antimony in August.
Taiwan has also been dealt a heavy blow, with the Taiwan authorities denouncing the 32% tariffs on Taiwanese imports. The decision stunned Taipei, which sees itself as having already paid “protection fees” to Washington – notably top chipmaker TSMC’s USD100 billion investment in semiconductor manufacturing in Arizona and Taiwan’s pledge to increase defense spending to 3% of GDP from 2.5%. Taiwan ranked seventh on Trump's list of countries and territories he imposed reciprocal tariffs on. The tariffs, however, do not apply to semiconductors. Michelle Lee, Spokeswoman for the Taiwanese authorities said that “this decision does not accurately reflect the trade and economic situation between Taiwan and the U.S. It is deeply unreasonable and highly regrettable”. Lee said Taiwan would “lodge a solemn representation” with the U.S. Trade Representative and push for negotiations to protect Taiwan’s interests. She said Taiwan’s growing exports to the U.S. were mainly due to surging demand for semiconductors and AI-related products, not unfair trade practices. She noted that Trump’s first-term tech restrictions on mainland China had prompted many Taiwanese firms to relocate production back home, naturally increasing exports to the U.S. Taiwan is the sixth-largest contributor to the U.S. trade deficit, with a record USD74 billion gap in 2024, a 54.6% jump from the previous year. Taiwan faced higher tariffs than regional U.S. allies such as Japan (24%), South Korea (25%), and the Philippines (17%). Taiwan’s Chinese National Association of Industry and Commerce said the tariffs were higher than expected and warned that it would severely challenge the island’s export-driven economy. Bloomberg economists estimated the tariff could lead to a 3.8% contraction in Taiwan’s GDP. They said the 32% tariff would cripple the island’s exports to the U.S., which account for over 60% of Taiwan’s total economy.
In addition to the newly imposed tariffs, the Trump administration’s cancelation of tax exemptions on low-value packages from China will disrupt the international trade order and increase costs for U.S. consumers. The policy to end the “de minimis” exemption for imports from China is “a blatantly self-defeating move” that will not only undermine the stability of global consumer goods supply chains, but also severely harm the interests of U.S. consumers, the China National Light Industry Council said in a statement. Starting on May 2, packages valued at up to USD800 from the Chinese mainland and Hong Kong will be subject to a duty rate of either 30% of their value or USD25 per item, with that rate increasing to USD50 per item after June 1. The policy change affects many of China’s 120,000 online exporters on platforms including Amazon, Shein, Temu and TikTok Shop, whose major market is the United States.
The New Civil Liberties Alliance (NCLA), a conservative legal group, filed what it said was the first lawsuit seeking to block Donald Trump’s tariffs on Chinese imports, saying the U.S. President overstepped his authority. The lawsuit, filed in federal court in Florida, alleges that Trump lacked the legal authority to impose the sweeping April 2 tariffs as well as duties authorized on February 1 under the International Emergency Economic Powers Act. “By invoking emergency power to impose an across-the-board tariff on imports from China that the statute does not authorize, President Trump has misused that power, usurped Congress’s right to control tariffs, and upset the Constitution’s separation of powers,” NCLA Senior Litigation Counsel Andrew Morris said in a statement. The lawsuit asks a judge to block implementation and enforcement of the tariffs and undo Trump’s changes to the U.S. tariff schedule.
China's statement on U.S. tariffs is available here
This overview is based on reports by the China Daily, the Global Times and the South China Morning Post.
