reciprocal tariffs<\/a>, which means they won\u2019t be subject to the 145% tariffs levied on China. The exemption seemed to reflect Trump\u2019s realization that his China tariffs are unlikely to shift more manufacturing of smartphones, computers and other gadgets to the U.S. any time soon.<\/p>\nIn China, the central tariff office flat-out declared there was \u201cno possibility for market acceptance\u201d of U.S. goods exported to China\u201d at the current tariff level.<\/p>\n
\u201cEveryone\u2019s pretty worried,\u201d said Hu Jianlong, founder of Brands Factory, a consultancy that works with Chinese companies trying to break into overseas markets. \u201cAt this point in time, there\u2019s no good way forward. This situation has not resolved … there\u2019s no final number. And so everyone\u2019s still waiting to see how this will develop.\u201d<\/p>\n
The high-stakes tariff war has come more than 20 years after China \u2014 with the help of the United States \u2014 joined the World Trade Organization and began to see its economy soar on luring foreign investments and exporting to the U.S. and other Western markets. By last year, China-U.S. trade was $582 billion, but tensions have flared over China\u2019s widening trade imbalance with the U.S. That led to the first tariff skirmish during the first Trump term.<\/p>\n
The trade deficit has since narrowed but stayed stubbornly high, at a time when the U.S. and other Western markets have also grown concerned about another onslaught of Chinese products such as electric vehicles.<\/p>\n
Decouple or \u2018de-risk\u2019? <\/p>\n
During his four-year term, former President Joe Biden stressed that the U.S. was not trying to decouple from China but to \u201cde-risk.\u201d He took the \u201csmall-yard, high-fence\u201d approach, under which his administration put up barriers in targeted sectors such as advanced chips, artificial intelligence and quantum computing that have national security implications.<\/p>\n
Now, Trump is declaring universal tariffs on Chinese goods but has said he\u2019s also willing to talk with Beijing. It remains unclear what his goals might be.<\/p>\n
\u201cWhat are they looking for in those negotiations? How much is it possible to reduce these tariffs? What are the other demands apart from China removing its retaliatory tariffs that the United States wants to put forward. We don\u2019t know what that would be,\u201d said Greta Peisch, who served as the general counsel for the Office of the U.S. Trade Representative in 2021-2024.<\/p>\n
The message from China\u2019s leadership is loud and clear. It will talk only when the U.S. stops \u201cmaximum pressure and capricious and destructive behavior,\u201d said Lin Jian, a Chinese Foreign Ministry spokesperson.<\/p>\n
Li Cheng, professor of political science at the University of Hong Kong, said the Chinese leadership is upset over being singled out by Trump when the U.S. president paused reciprocal tariffs for 90 days for all other countries. Beijing wants to make sure that \u201cDonald Trump not state one thing in the morning and say other things in the evening,\u201d Li said, and that Trump\u2019s policies on China are not hijacked by his anti-China, hawkish advisers.<\/p>\n
With no leadership-level negotiations in the immediate future, businesses are exploring their options.<\/p>\n
Lisa Li, who works in sales for an athletic wear manufacturer in the northern Chinese province of Hebei, said her business was negotiating with clients over whether they could split the increased costs. It\u2019s too early to say if her company is to give up on the U.S. market, she said, but it will \u201cdefinitely expand other avenues for sales,\u201d such as in Australia or Europe.<\/p>\n
Differing views, but optimism is sagging<\/p>\n
In the eastern Chinese city of Wenzhou, a manufacturing hub, a holiday lights maker was less optimistic. Bo, who shared only his surname out of concern for retaliation, said he could \u201conly give up\u201d if the tariff hikes were here to stay because other markets might not work. <\/p>\n
\u201cIn the past few years, the European market has been in a slump,\u201d Bo said. \u201cSo we had wanted to try and develop our business in the United States.\u201d<\/p>\n
In Hong Kong, Danny Lau, who runs an aluminum-coating factory in the nearby southern Chinese city of Dongguan, said one of his U.S clients would keep buying from him for an ongoing project but was unsure about the next project. Another client told Lau that the chances are slim to strike a deal when tariffs are so high. Lau has been exploring other markets, but he says it\u2019s not easy because some may find his high-quality products too expensive.<\/p>\n
At a port in the Chinese city of Shanghai, ships heading to the U.S. had almost vanished by Thursday, the day after Trump\u2019s tariff on China took effect, according to a report by the financial news site Caixin. Major shipping lines were drastically cutting back on trans-Pacific routes, the report said.<\/p>\n
For the longer term, the tariff war is likely to prompt Chinese businesses to diversify their supply chains and move part of their manufacturing capacity outside of China, and even to the United States, said Hu, the consultant.<\/p>\n
Some might follow in the footsteps of the Tianjin steelmaking business, which gave up trading with the U.S. after both Trump and Biden raised tariffs on Chinese steel. \u201cThe best plan is to not come into contact,\u201d said David Yu, who works in the company\u2019s foreign sales department.<\/p>\n
However, not everyone is ready to give up on the U.S. market. Zou, the exporter in Ningbo, describes the U.S. market as \u201creliable and without finicky demands.\u201d<\/p>\n
\u201cIt\u2019s the best market on Earth,\u201d he said. \u201cI am waiting for the rainbow after the storm.\u201d<\/p>\n
___<\/p>\n
Wu reported from Bangkok and Tang from Washington. AP researcher Shihuan Chen in Beijing and writer Kanis Leung in Hong Kong contributed to this report.<\/p>\n","protected":false},"excerpt":{"rendered":"When the first two rounds of 10% tariffs hit, Zou Guoqing, a Chinese exporter, groaned but didn\u2019t find…\n","protected":false},"author":2,"featured_media":15674,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[51,1395,7684,10678,10681,32,5211,4179,10680,5212,10679,3058,714,10675,10677,10676,285,10682,5214,53,7143,49,5213,978,659,10673,10674],"class_list":{"0":"post-15673","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-business","9":"tag-china","10":"tag-china-government","11":"tag-danny-lau","12":"tag-david-yu","13":"tag-donald-trump","14":"tag-economic-policy","15":"tag-general-news","16":"tag-government-and-politics","17":"tag-government-policy","18":"tag-greta-peisch","19":"tag-international-trade","20":"tag-joe-biden","21":"tag-josh-lipsky","22":"tag-lin-jian","23":"tag-lisa-li","24":"tag-politics","25":"tag-production-facilities","26":"tag-tariffs-and-global-trade","27":"tag-technology","28":"tag-u-s-news","29":"tag-united-states","30":"tag-united-states-government","31":"tag-us","32":"tag-usa","33":"tag-washington-news","34":"tag-world-trade-organization"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114328992217844244","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/15673","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=15673"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/15673\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/15674"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=15673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=15673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=15673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}