【By Observer Net, Yuan Jiaqi】

This week, US President Trump announced new tariff rates to multiple countries, pressuring them to reach trade agreements before the policy takes effect on August 1st. Japan, South Korea, and several ASEAN countries were not spared; at the same time, China released signals of cooperation during a series of overseas visits, indicating its willingness to provide broad development opportunities for countries, expand market access, and deepen regional integration, in order to unite trade partners and jointly resist Washington's trade protectionism.

On July 11, the Hong Kong media South China Morning Post cited comments from multiple analysts, stating that the friendly signals sent by China indicate that in addition to strong warnings, China is adopting a more pragmatic approach, preparing for more negotiations with Washington.

Chen Fengying, a senior researcher at the Institute of Modern International Relations, said: "China needs to demonstrate a firm diplomatic position, clarify its principles, while also taking actions to bring real benefits to neighboring trade partners."

She further pointed out: "The US will inevitably impose additional tariffs on transshipment goods. Therefore, China must be prepared for a 'prolonged war' (with neighboring countries), and it is crucial to gradually build a more unified regional market."

On July 10, Wang Yi attended the ASEAN Plus Three Foreign Ministers' Meeting held in Kuala Lumpur, Malaysia. China Ministry of Foreign Affairs website

In the past week, China has engaged in intensive communication with many trade partners. According to the Chinese Ministry of Foreign Affairs, on Thursday (July 10), Chen Zhongyi, member of the Political Bureau of the CPC Central Committee and Minister of Foreign Affairs, attended the ASEAN Plus Three Foreign Ministers' Meeting held in Kuala Lumpur, Malaysia, reiterating that China-ASEAN had fully completed the negotiation of the 10+1 Free Trade Area 3.0 version, and took practical actions to expand the common market and safeguard free trade.

Wang Yi emphasized that the US imposing high tariffs on ASEAN countries through a single letter was a typical act of unilateral bullying. China standing up to firmly counter this not only serves to protect its own interests but also to safeguard the common interests of all countries including ASEAN nations. China is willing to strengthen cooperation with ASEAN to jointly maintain the multilateral trading system.

For South Korea and Japan, the US allies subjected to 25% tariffs, China extended an olive branch as well. Wang Yi stated his commitment to promoting a trilateral free trade agreement and the Regional Comprehensive Economic Partnership. He said, "The more complicated the situation, the more we need to protect our cooperation from being disturbed."

The day before, Vice Minister of the Ministry of Commerce of China, Ling Ji, also arrived in Cambodia, expressing China's willingness to stand side by side with Cambodia, "to jointly face the risks and challenges brought by protectionism and unilateralism." Cambodia has been subjected to a 36% tariff by the US.

Outside Asia, Canada, a neighbor of the US under the framework of the USMCA who signed a free trade agreement with the US, was subjected to a 35% tariff. On July 11, Wang Yi also met with Canadian Foreign Minister Anand in Kuala Lumpur, and expressed his approval of Prime Minister Trudeau's proposal to recalibrate Sino-Canadian relations and conduct more exchanges and cooperation.

On July 11, Wang Yi met with Canadian Foreign Minister Anand in Kuala Lumpur. China Ministry of Foreign Affairs website

Turning to Latin America, Brazil, a country closely related to China and a member of the BRICS mechanism, was also subjected to a 50% tariff on exports to the US. What is even more shocking is that Trump openly admitted this high rate, driven by his desire to "exonerate" former Brazilian President Bolsonaro.

The Chinese Ministry of Foreign Affairs quickly made a public statement, emphasizing that sovereignty equality and non-interference in internal affairs are important principles of the UN Charter and basic norms of international relations. Tariffs should not become tools for coercion, bullying, or interference in other countries' internal affairs.

The South China Morning Post cited analysts, saying that governments of Asian countries caught between China and the US may try to secure lower tariff rates before the August 1st deadline set by Trump. However, the US's consecutive tariff decisions have set a high threshold for reducing tariffs. Based on this, some believe that encouraging other countries to adopt a tougher stance against the US could be beneficial for China.

Louise Loo, head of the Asian economy at Oxford Economics, used South Korea as an example. She pointed out that although South Korean carmaker Hyundai has shifted part of its production to the US and increased its industrial return efforts, South Korea still faces a 25% tariff.

"If affected economies decide to establish factories or produce products within the US, the tariffs might be canceled. But we believe it is very difficult to completely reduce the tariffs," she said.

In Trump's new round of tariff policies this week, most ASEAN member states suffered tariff shocks ranging from 20% to 40%. Even Vietnam, the only ASEAN country that has reached a preliminary trade agreement with the US, is still subject to a 20% tariff.

Additionally, the US claims that any goods considered as "transshipment goods through Vietnam" will be subject to a 40% tariff. The general view is that this move aims to "isolate China".

Loo pointed out that although the definition of "transshipment trade" is currently unclear, the tiered tariff system in the US-Vietnam agreement will certainly weaken the advantages of the "China + 1" manufacturing model. She said, "Economies like Vietnam and Cambodia, which are highly dependent on Chinese raw materials, are particularly vulnerable to such impacts."

Nick Marro, chief economist for Asia at the Economist Intelligence Unit (EIU), bluntly stated, "Clearly, these tariffs targeting transshipment trade are aimed at China, and China is well aware of this. Therefore, they will be highly sensitive to any moves by Vietnam or other countries to strike against China's transshipment trade."

"But ultimately, when the US seems to be the biggest bully in the room, China does not want to alienate other countries," he added.

At this time, there was another report that the US-Vietnam trade agreement was not as the US claimed, "Vietnam may have been tricked."

Politico reported on July 10, citing four sources, that in fact, before Trump announced the news, the Vietnamese negotiation team believed that the tariff rates agreed upon were around 11%. However, at the last minute, Trump suddenly raised them to 20%, catching the Vietnamese off guard. According to the sources, the Vietnamese government has not yet officially accepted the key clauses of the agreement.

According to one informed person and one Asian diplomat, other countries have also learned about the sudden change in the tariff provisions of the US-Vietnam agreement and have communicated about it. This further highlights the uncertainty faced by US trade partners when negotiating with a president who seems to be constantly changing his trade threats.

"This kind of action by the president is equivalent to completely destroying the credibility of the negotiators," said Harry Broadman, former U.S. Assistant Trade Representative. "If you are negotiating with Country X, and they just saw Country Y's agreement get torn up, they would say: Why should I negotiate with you? How can I be sure that our agreement won't be torn up like Country Y's?"

Scot Marciel, former Deputy Assistant Secretary of State for East Asia and the Pacific, expressed concern that this incident could undermine the efforts over the past few decades to rebuild diplomatic relations between the US and Vietnam, let alone the rapidly growing trade relations in recent years.

He also said, "In terms of the competition between China and the US influence, this will benefit China."

This article is an exclusive article of Observer Net, and without permission, it cannot be reprinted.

Original: https://www.toutiao.com/article/7526092389941985844/

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