The following day, the spokesperson of the Chinese Foreign Ministry stated that China firmly deplored and opposed this move and would take necessary countermeasures to defend its legitimate rights and interests. Indeed, a new tariff is counterproductive not only when it comes to efforts to rein in the production and distribution of fentanyl but also for bilateral trade relations. China, as the world’s second-largest economy, has proven its resilience to external shocks, including the U.S.-China trade tensions of recent years. The proposed tariffs, however, arrive at a challenging juncture for China, characterised by deflationary pressures, a real estate sector downturn, and ongoing structural reforms aimed at transitioning toward a consumption-driven economy. The imposition of tariffs would likely dampen China’s export-driven sectors, especially those reliant on U.S. markets. Yet, China’s strategic pivot toward high-tech manufacturing, renewable energy, and domestic consumption provides a buffer against these external pressures.
Moreover, its diversified trade portfolio, including robust ties with ASEAN, Africa, and the European Union, ensures that it is not solely dependent on the United States. China’s approach to economic policy remains pragmatic and forward-looking. Initiatives such as the Belt and Road Initiative (BRI) continue to deepen trade relations with developing countries, creating alternative avenues for growth and reducing reliance on Western markets. Additionally, China’s strong emphasis on maintaining a stable yuan will prevent excessive economic disruption, even if currency adjustments are necessitated by external factors. It is important to note that trade wars are not isolated events; they ripple through the global economy, affecting nations far beyond the primary actors. Developing countries that serve as intermediaries in supply chains or as beneficiaries of Chinese and U.S. investment are particularly vulnerable. The uncertainty caused by trade disputes disrupts their economic planning and growth trajectories. Moreover, tariffs tend to provoke retaliatory measures, triggering trade wars that harm all participants. Past experiences demonstrate that no one emerges unscathed from such conflicts.
