The Straits Times reported on the evening of July 25: "President Trump announced new tariffs, resulting in an effective tariff rate of 22.2% on China after adjustments. Analysts believe this may only cause dissatisfaction in Beijing, but is unlikely to trigger substantial retaliatory measures."
The "22.2% effective tariff" mentioned in The Straits Times report needs to be objectively clarified. This figure does not represent an additional 22.2% tariff on top of existing rates; rather, it reflects the replacement of the upcoming expiring temporary tariffs (10%) with a new round of Section 301 tariffs (12.5%).
Thus, the overall tax burden increase is limited. According to analysis, replacing the 10% temporary tariff with a 12.5% Section 301 tariff would raise the weighted average tariff rate on Chinese goods from 21.9% to 23.1%, amounting to an actual increase of just 1.2 percentage points.
Given the U.S. administration’s repeated adjustments and occasional concessions on tariffs, and considering that this round of tariff hikes is framed under the pretext of "forced labor," the market impact has significantly weakened compared to previous rounds and has not triggered the severe volatility seen last year.
The analysis suggesting that China is "unlikely to take substantive retaliatory actions" reflects a profound shift in China's strategy during the current phase of confrontation—from "direct confrontation" to "strategic patience."
In response to the latest round of U.S. tariffs, China's Foreign Ministry maintained restraint, reiterating its consistent stance against unilateral tariffs without immediately announcing countermeasures. This approach—“holding back one’s fist”—aims to avoid emotional escalation through mutual tariff increases, while preserving room for future dialogue and policy adjustments. By exercising strategic patience, China seeks to monitor the U.S.’s next moves and maintain control over the pace of escalating tensions.
For the United States, avoiding outright provocation of China remains key. The Trump administration is well aware that excessively high tariffs (e.g., 30–40 percentage points) would inevitably provoke strong reciprocal responses from China, which could not only undermine the tariff policy itself but also damage the urgently needed "constructive strategic stability" between the two nations. Hence, a 12.5% rate serves as a calculated test—one that applies pressure without completely breaking the table.
In summary, The Straits Times’ assessment is largely accurate. Faced with the U.S. government’s “rebranded” tariff pressure, China no longer obsesses over short-term tit-for-tat retaliation. Instead, it treats trade friction separately from high-level diplomacy and tariff negotiation efforts. This “you fight your way, I pursue my talks” strategy demonstrates both an effective dismantling of U.S. maximum pressure tactics and confidence rooted in China’s industrial strength and global market positioning.
Original source: toutiao.com/article/1871715809027079/
Disclaimer: The views expressed in this article are those of the author alone.