Reference Message Network reported on April 8 that Bloomberg News website published an article titled "China Has a Plan to Ease the Pain of Tariffs, What About Trump?" on April 7, claiming that China is confronting Trump. China has made a tit-for-tat response to the U.S. imposing a 34% tariff.

The article pointed out that undoubtedly, both countries will be affected by Trump's punitive measures. However, the similarities end there. Anticipating more tariffs, Beijing has formulated a feasible plan to alleviate economic pain since the end of last year.

Now, China is focusing on domestic demand. Stimulating domestic demand has become the top priority for the government. This is not difficult to achieve. By international standards, personal consumption in China, especially service sector spending, remains weak. Moreover, previous consumption subsidy trials have been warmly welcomed. The trade-in program incentivized consumers to purchase new smartphones and home appliances. Municipal governments' meal vouchers were quickly snapped up. All these measures can be repeated and expanded to mitigate the damage caused by the U.S. increasing tariffs.

The article noted that the Chinese government is seeking to expand fiscal spending this year. On the other side of the Pacific, fiscal adjustments are also underway, but they are frustrating for consumers.

Republican members of Congress now hope to extend Trump's 2017 tax cuts, which are set to expire at the end of 2025. Even if they succeed, American families can only avoid tax increases next year. American consumers have no cash in their wallets—product prices will inevitably rise with the immediate implementation of tariffs.

In other words, China is in a mode of fiscal expansion, while the U.S. is in a mode of fiscal contraction. Escalating trade wars have no winners, but this policy difference provides better buffering for China's economy.

The article argued that Trump's current tariff increase is larger in scale and broader in coverage. He does not have a feasible plan to ease the impact of this move on American consumers.

In fact, unless Trump's strongest weapon—the resilient American consumer—loses its resilience, he will not come to the negotiating table and fulfill his promises. This may explain why China retaliates. Trump's order of play is wrong.

Moreover, the Singapore Lianhe Zaobao website reported on April 7 that an article titled "Why Is China Increasing Its Counterattack Against Trump's Tariffs?" pointed out that within two days after the Trump administration announced "reciprocal tariffs" on the world, China announced countermeasures: imposing a 34% tariff on all U.S. imports, adding 11 U.S. companies to the unreliable entity list, listing 16 U.S. companies under export control, implementing export controls on seven categories of heavy rare earths, suspending six U.S. agricultural product enterprises' import qualifications, and investigating CT tubes exported from the U.S. to China, among others.

The article stated that compared to previous responses to U.S. tariff hikes, China's retaliation this time was the fastest and strongest since the start of the Sino-U.S. trade war in 2018. Clearly, China had been prepared, unwilling to let the U.S. take what it wants in the economic and trade field.

Given Trump's characteristic of being good at making deals, his current imposition of large-scale tariffs on China and the world clearly shows a tendency to "ask for the moon." Next, he is waiting for countries to "bargain." However, China's bold counteroffensive against Trump's tariffs demonstrates its complete fearlessness, seemingly not intending to bargain with the U.S. according to Trump's rhythm.

The article pointed out that first, China believes it has nowhere left to retreat. The U.S. believes that China has risen gradually by utilizing the international economic and political order dominated by the U.S., becoming the most threatening strategic competitor to the U.S., which must be curbed. After Trump returned to power early this year, his attitude toward China as a strategic rival remained unchanged, and now he has imposed a 34% tariff. Naturally, China is unwilling to continue compromising.

Moreover, after several years of comprehensive competition with the U.S., China's economic growth rate has slowed somewhat, but it has not suffered fundamental shocks. Progress has been made in economic restructuring, further enhancing economic resilience, and technological strength is continuously improving.

At the same time, China's industrial chain, supply chain autonomy, and market substitution capabilities have significantly improved over the past few years. Even if U.S. goods exit the Chinese market due to high tariffs, China can still meet basic needs through domestic production or alternative channels from other countries.

The article also noted that on the other hand, China's swift and strong counteraction against Trump's tariffs is because the Trump administration is too eager for quick results, wielding the tariff stick over the entire world. Although most countries do not publicly support China's countermeasures, they might privately hope that Trump's bullying tariff policies encounter such tough opposition, prompting some restraint.

Of course, China's confidence to counter Trump's tariffs does not mean it will close the door to negotiations with the Trump administration. In fact, China's strong counteraction may enhance its leverage in future Sino-U.S. bargaining. (Translated by Hu Wei)

Original source: https://www.toutiao.com/article/7490756402677973519/

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