Xi’s No 2 says China is equipped to fight Trump’s tariff hikes
Xi’s government has pledged to retaliate against Washington’s “reciprocal” levies
[HONG KONG] Chinese Premier Li Qiang said his country has ample policy tools to “fully offset” any negative external shocks, and reiterated his optimism about the growth of the world’s second-largest economy in 2025, despite the latest tariff threat from US President Donald Trump.
During a call with European Commission President Ursula Von der Leyen on Tuesday (Apr 8), Li said China’s macroeconomic policies this year have fully taken account of various uncertainties, according to an official readout. Beijing is strongly confident about maintaining the country’s healthy and sustainable economic growth, added Li, China’s No 2 official, after President Xi Jinping.
The China-EU call came hours before both economies are set to be hit by Trump’s so-called reciprocal tariffs. While Europe faces an added 20 per cent levy, China is in line for a massive surtax of totalling 104 per cent starting 12.01 am Apr 9. A US official told Bloomberg on Tuesday the administration is indeed moving forward with that more-than-doubling plan.
Li criticised the punitive action on all American trading partners as a typical example of unilateralism, protectionism and economic coercion. He added that China’s firm response is not only to safeguard its own interests but also to defend international trade rules.
“Protectionism leads nowhere – openness and cooperation are the right path for all,” Li told Von der Leyen.
Hollywood ban?
China’s premier also urged the EU to strengthen communication with Beijing and expand mutual opening up, adding that both sides should push for a new round of high-level dialogue on strategic cooperation and trade, as well as on green and digital developments as soon as possible.
Xi’s government has pledged to retaliate against Washington’s “reciprocal” levies. In an illustration of the potential response, two influential Chinese bloggers on Tuesday posted an identical set of measures that authorities are mulling to hit back at the US, including duties on American farm goods and a ban on Hollywood movies.
In Washington, Trump claimed that “China also wants to make a deal, badly”, and said he’s waiting for Beijing’s call. Later, White House Press Secretary Karoline Leavitt told a press conference that the president “will be gracious” if China’s leadership reaches out.
The impact of the US tariff hikes diminishes with each ratcheting up, according to analysis by Goldman Sachs economists. While an initial 50 per cent surtax slashes China’s GDP by 1.5 percentage points, a further 50 per cent increase cuts by only 0.9 percentage point, the bank’s economists, including Andrew Tilton and Hui Shan, wrote in a note. BLOOMBERG
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