On April 10, China’s National Film Administration declared imports of American films, which would be “modestly low” in response to the “misuse of abuse” of the US government. This curious vengeance is one of the many reactions that China has provoked since Trump’s April 2 tariff. Not only did China increase tariffs on American goods, but it also expanded the scope of trade war. This article analyzes China’s multi-domain, escalatery measures and assesses their effects.
China’s reactions come in four categories: an anti -retarder tariff rate hike, restrictions on some exports to the US, forcing American companies and rhetoric to get external support.
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the door is open
First, consider the title response on the tariff. In response to Trump’s tariff in February and March, China began with a calibrated response, increasing tariffs on agricultural and energy products imported from the US. Then in response to the tariff of April 2, the tight-for-tat increases. Starting with 34% tariffs on all American goods announced on April 4, the tariff rate reached 125% at the time of writing this piece.
Once the US increased the tariff on Chinese goods thrice in two months, up to 54%, the Chinese leadership calculated that it had to proceed to D-Susscale. But at the stage of each growth, China kept its highest tariff rate lower than the US tariff rate, keeping the door open for talks.
However, the major point is that the US goods exported to China in 2024 are about one -third of Chinese goods exported to the US. Thus, the effect of similar tariff rates will be more on China’s producers than American producers. In addition, the Chinese economy is production-centered and not consumed. For this reason, China opted to move conflict to another domain where it assumes that it holds the aces.
Betting on rare-earth metals
Its second reaction was to apply export control to alloys and ores of many rare-earth metals. These restrictions are not new; They only expand the list of controlled metals. In December 2024, Trump responded to Biden-era export control over its semiconductor industry by strengthening export control over Gallium, Germanium, Antimony and superhard materials, before taking over. While rare earth metal restrictions make a lot of news, they are unlikely to stop the US. However important for various applications – from vacuum cleaner to fighter jets – these metals are required in the amount of minute. The total value of rare-earth compounds and metals imported by the US last year was $ 170 million, meaning that prices can also be absorbed by American firms, five times the increase in prices due to China’s sanctions. The US government also holds a stockpile of some rare earth to manage short -term risks.
In the long run, prices will increase prices in the frequent weapons of China’s constant weapons of its rare-earth dominance, which will give extraction and financially elsewhere. Like American weapons of the financial system, the dollar will be likely to reduce the “excessive privilege” of the dollar, with China’s export sanctions reduce its rare-earth dominance. Some cards permanently lose their value permanently after playing.
American firm under fire
The third reaction involves targeting several American firms for various reasons. The Ministry of Commerce banned 11 companies from foreign investment and trade in China, as they provided military technical assistance to Taiwan. Another 16 American companies were placed in the export control list, which prevents them the sale of dual -use items, as they were ‘engaged in activities that could endanger China’s national security and interests’. Anti-dumping tests on American Medical CT X-ray tubes, suspension from some American suppliers of poultry and sorbet, an anti-Economic inquiry on Duppont, and orders of not making further delivery of boing jets to Airlines do not include wide range of tasks that have been announced.
This reaction originates before the tariff war. Some of these tasks were considered in response to the biden-era sanctions on China. They were eventually approved by separate state agencies, once to increase the green signal in response to the ‘Liberation Day’ tariff. Among all the actions in China, this seems to be the most harmful because Tesla-Hawar, which incorporates American firms, depends on its China plants. At the same time, these measures will believe in the promise of policy stability that draws foreign companies towards China, China +1 tendency.
Seeing others
The final response is China’s free trade champion and the world trade organization (WTO) as the lead protector. The story of China is that other countries should recognize how China is fighting not for itself, but for the whole world. Since 2 April, it has started dialogue with the European Union, Vietnam and Malaysia. In these negotiations, it has deployed itself as a rule follower in global trade. Despite the aggressive attraction, some countries have joined China in increasing tariffs, showing that the countries are attentive as Chinese intentions because they belong to Trump’s business nature. Most developing countries areware of Chinese goods for floods in their domestic markets, and it is unlikely to decrease until China allows the firms of other countries to reach more access to its market.
These four reactions show that China has several options, but each has drawbacks. This is why China issued a white paper on 9 April, attacking a consistent tone and makes a case for “equal-foot dialogues” to resolve differences between the US and China. While many memes about Trump are eagerly awaited for Xi’s phone call, it is important to increase the trade war for China’s economy. The ability to absorb pain due to such wars is ultimately a task of the country’s GDP per person. And because the US is five times more rich than in China, it can play this game for a long time.
The root cause of China’s problems is its anemic domestic consumption. Until it improves, it will depend on the export of excess, damaging the industrial capacity of other countries. However, governments are no longer ready to give a free pass to China’s overcapacea. Thus, high tariffs against China will still remain, even if this round of American-China trade war is resolved. Without an economic axis, China’s troubles will not go away.
(Pranay Kotasthan is the deputy director of Taxila Institution and presides over the High-Tech Geopolitics Program)
Disclaimer: These are the personal opinions of the author
