China Counters US Tariff Hikes with Economic Measures

In response to the U.S. government's recent tariff hikes labeled as 'reciprocal,' China has firmly opposed these measures, asserting they amount to protectionism and unilateral bullying. Chinese state media emphasized that despite the tariffs, which have escalated up to 34%, China has sufficient policy tools to mitigate economic impacts, including potential interest rate cuts. Notably, China's reliance on the U.S. market has diminished, with exports to the U.S. dropping from 19.2% in 2018 to 14.7% in 2024, while trade with ASEAN nations and Belt and Road Initiative countries has increased. The Chinese government also anticipates ongoing economic pressures and has developed strategies to support domestic demand amidst a potential trade war. Despite market volatility and fears of further retaliatory measures from the U.S., China maintains that 'the sky won’t fall' and encourages resilience in its economy. Overall, the situation signals a tense outlook for U.S.-China trade relations, with both sides preparing for prolonged conflict.