If China was angry at the United States for imposing an extra 10% tariff on all Chinese goods, it did a good job of hiding it.
It urged Washington to start talks after repeated warnings that there would be no winners in a trade war.
It held its fire until midnight in Washington – and then just as the tariffs on China kicked in, Beijing announced retaliatory tariffs of 10-15%, starting 10 February, on various US imports, including coal, crude oil and large cars.
The Chinese government may have remained calm in the hope of doing a deal with Washington to avoid further tariffs – and to keep the relationship between the world’s two largest economies from spiralling out of control.
After all, US President Donald Trump agreed to reprieves with Canada and Mexico just hours before the tariffs on them took effect. Trump and China’s President Xi Jinping are expected to talk this week.
The US levy will sting – especially because it adds to a slew of tariffs Trump imposed in his first term on tens of billions of dollars of Chinese imports. And China’s population is already concerned about their sluggish economy.
Beijing and Washington have gone toe-to-toe on tariffs before. But a lot has changed since Trump 1.0.
For one, the Chinese economy is not as reliant on the US as it was back in 2020. Beijing has strengthened its trade agreements across Africa, South America and South East Asia. It is now the largest trading partner of more than 120 countries.
A deal could still be in the offing but the additional 10% may not offer the leverage that Trump wants, says Chong Ja Ian from Carnegie China.
Xi’s ‘win-win’ as America retreats
President Xi Jinping may also see a bigger opportunity here.
Trump is sowing division in his own backyard, threatening to hit even the European Union (EU) with tariffs – all in his first month in office. His actions may have other US allies wondering what is in store for them.
In contrast, China will want to appear a calm, stable and perhaps more attractive global trade partner.
“Trump’s America-first policy will bring challenges and threats to almost all countries in the world,” says Yun Sun, director of the China programme at the Stimson Centre.
“From the perspective of US-China strategic competition, a deterioration of US leadership and credibility will benefit China. it is unlikely to turn well for China on the bilateral level, but Beijing surely will try to make lemonade…” (BBC)