China faces “kind” US reciprocal tariffs despite previous efforts for negotiations

On Wednesday, Donald Trump declared 34% tariffs on Chinese imports, calling them “discounted” reciprocal tariffs despite earlier attempts by China to avoid higher duties. The announcement came during what he labeled “Liberation Day,” when he unveiled a plan to apply baseline tariffs of 10% to all countries and higher rates on selected nations.

Trump described the new approach as a way to make foreign nations pay “for the privilege of selling in the US market.” He argued that while the United States could have matched tariff rates dollar for dollar, his administration chose a lower figure to show restraint. “The tariffs will be not a full reciprocal,” he said. “I could have done that yes, it would have been tough for a lot of countries. We didn’t want to do that.”

In his remarks, Trump emphasized that China has not always provided fair access to American goods and services. “They charge us, we charge them less, so how can anybody be upset?” he said. He suggested that in earlier years, the US had been more successful in trade but had lost ground recently. “We had a great country four years ago in terms of the economics, and we were doubling up on China. Nobody was going to catch us but so much of it slipped away in the last four years under Biden,” he said.

Trump recalled that seven years ago, the United States collected “hundreds and billions of dollars” in tariffs from China and said Chinese leaders understood why Washington felt it needed to take firm action. “President Xi, he understood. They all understand that we are gonna have to go through tough love maybe. They are ripping us off, and they understood it,” he said.

China has taken steps to restrict local companies from investing in the US

According to a Bloomberg report, China’s National Development and Reform Commission instructed several of its branches to suspend registrations and approvals for any firms planning to invest in the US. The exact timing of these steps and the duration of the suspension remain unclear.

China has long placed certain limits on overseas investments for reasons linked to national security and concerns about capital outflows, but these new restrictions come at a time of heightened trade tensions between the world’s two largest economies.

Official data put Chinese outbound investments into the US at $6.9 billion in 2023. It is not apparent whether existing commitments or major financial holdings, such as China’s US Treasury purchases, would be affected.

Although this new restriction is mainly focused on corporate investment in the US, it throws another element of uncertainty into global trade as firms look for ways to move production or strike alternative deals to avoid the effects of new barriers.

The situation further complicates relations between China and the US, especially with the freshly announced 34% tariffs.

China couldn’t dodge US tariffs

In an apparent last-ditch effort to ease tensions, China’s official newspaper, the People’s Daily, published an article highlighting the benefits that US farmers and technology companies have gained from trade with China.

The piece, credited to “Zhong Sheng,” a pen name that translates to “Voice of China,” underlined how US agricultural imports have helped American growers and addressed China’s own demand.

This commentary arrived before Trump’s announcement of global tariffs.

Observers noted that the piece was the second in a series looking at China-US ties, timed alongside the president’s plan to finalize his reciprocal tariffs on April 2.  Bloomberg reported that some saw the article as a way for Beijing to remind Washington of the economic upsides of working with China.

John Gong, once a consultant to China’s Commerce Ministry and now a professor at the University of International Business and Economics in Beijing, said: “This article appears to be Beijing’s last effort to avert Trump’s tariffs against China in the hope of changing his mind.”

China has hinted towards further retaliation in trade tariffs

A previous article on Monday showcased how China’s market scale and production abilities benefited high-profile American companies like Tesla Inc. and Apple Inc.

While the piece argued for cooperation and mutual gains, it also laid out areas where China could retaliate.

Beijing has already targeted US agricultural and energy goods in response to the 20% blanket tariffs that Trump imposed on Chinese products earlier this year. Authorities also investigated Alphabet Inc.’s Google and placed US gene-sequencing company Illumina Inc. on a blacklist of entities under special scrutiny.

At the diplomatic level, China has been vocal in its criticism of the tariffs, with its top envoy calling on Trump to remove them.

Foreign Minister Wang Yi spoke to the Russian state-run outlet RIA Novosti on Tuesday, saying the US duties cited China’s alleged role in the fentanyl crisis without adequate evidence. “If the US side persists in exerting pressure and even continues to engage in blackmail, China will resolutely counteract it,” Wang stated.

Analysts caution that these moves could be the start of prolonged trade disagreements as both nations show signs of readiness for further escalation.

Some expect more Chinese efforts to protect local industries and control where capital flows. In contrast, others believe Washington may add new duties or expand enforcement actions against products that Trump deems unfairly traded.

For now, the 34% reciprocal tariff stands out as a steep figure, though Trump insists it is lower than what he could have imposed to match China’s rates.

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