China Hits Back with Tariffs in Trade War

By Evans Momodu
2 minute read


China’s measured response to Trump’s latest tariffs suggests a strategic approach rather than outright escalation.

While Beijing has imposed tariffs of 10-15% on U.S. energy products in response to Trump's 10% tariffs, its reaction has been notably restrained compared to previous trade disputes.

There are a few possible reasons for this:

1. Economic Priorities

China's economy is facing domestic challenges, including slower growth, a struggling property sector, and concerns over capital flight. A full-blown trade war with the U.S. could further destabilise its economic outlook, making restraint the more pragmatic choice.

2. Avoiding Market Shock

Markets react negatively to trade tensions, and Beijing likely wants to avoid unnecessary volatility. By responding in a measured way, China can reassure investors while keeping its options open for future negotiations.

3. Maintaining Diplomatic Leverage

A calm response allows China to position itself as the more responsible player in the dispute, potentially garnering international support. It also leaves the door open for diplomatic talks, rather than escalating tensions into an uncontrollable economic conflict.

4. Keeping Pressure on Trump

With a U.S. election on the horizon, China may see limited benefit in escalating a trade war that could hurt American consumers and businesses—something that could influence Trump’s political standing.

Beijing may be playing the long game, waiting to see how the political landscape shifts before making any drastic moves.

In short, rather than engaging in a tit-for-tat trade war, China appears to be responding with calculated restraint, prioritising economic stability and strategic advantage over immediate retaliation.
Source: Sky news