China has raised the tariff rate on imported goods originating from the U.S. from 34% to 84%, as a direct countermeasure to the U.S.'s unilateral escalation of tariffs on China. This decision reflects the intensity of the China-U.S. trade game and also demonstrates China's firm stance in safeguarding national interests and countering unilateral bullying.

1. Policy background and direct motivations

1. The necessity of reciprocal countermeasures

On April 8, the United States announced that it would raise the "reciprocal tariff" rate on goods exported from China to the U.S. from 34% to 84%, with plans for it to take effect from April 9. This adjustment of tariff rates by China is a direct response to the actions of the U.S., strictly following the "reciprocal principle," aimed at conveying the message of "seeking cooperation through struggle." This move is not only a counter to U.S. unilateralism but also forces the U.S. to reassess the strategic costs of escalating tariffs through symmetrical measures.

2. Systemic provocations by U.S. policy

The U.S. tariff policy in this round has obvious strategic targeting. For example, the Trump administration calculated the tariff rate using the formula "trade deficit ÷ other party's export amount × 50%" and even imposed tariffs on countries like Vietnam and Mexico that are linked to China's supply chain, attempting to sever China's connection with the global supply chain. Additionally, the U.S. canceled the duty-free policy for Chinese goods under $800 (T86 policy), directly impacting cross-border e-commerce businesses. By raising tariff rates, China aims to weaken the U.S.'s attempt to reconstruct the global supply chain through tariffs.

2. Strategic considerations for China's countermeasures

1. Multidimensional countermeasure matrix

China's countermeasures are not limited to tariffs. For example:

• Export controls on rare earths: Implementing export restrictions on medium and heavy rare earths like samarium and dysprosium, directly impacting the U.S. military and new energy industries (the U.S. relies on China for 80% of its rare earths).

• Legal and diplomatic measures: Suing the U.S. in the World Trade Organization for violating the most-favored-nation treatment principle and joining forces with the European Union, Brazil, and other economies to promote reforms of multilateral rules.

• Precisely targeting U.S. pillar industries: Focusing on agricultural products (soybeans, corn), energy (liquefied natural gas), and the automotive sector, directly impacting U.S. agricultural states and manufacturing jobs.

2. Protection of the domestic market and acceleration of internal circulation

High tariffs suppress the dumping of U.S. goods in China, freeing up market space for domestic industries. For example, domestic new energy vehicles (e.g., BYD) and electronic products (e.g., Huawei) can further replace American brands like Tesla and Apple. Meanwhile, supply chain pressures are forcing enterprises to accelerate the localization process, such as in the fields of aircraft engines and precision instruments.

3. Potential impacts and challenges

1. Intensification of global economic risks

• Supply chain differentiation: Countries like Vietnam and Mexico have taken on some orders from China, but still rely on Chinese intermediate goods (e.g., 60% of Vietnam's textile industry's cotton yarn comes from China). The cumulative tariffs may lead to rising global supply chain costs.

• Inflation pressure: U.S. consumers are panic buying due to rising prices, with retailers' inventory turnover days dropping to pandemic levels, while rising import costs from China may be transmitted to the end market.

• Damage to the multilateral trading system: The WTO dispute resolution mechanism faces the risk of paralysis, and the prevalence of unilateralism may lead more countries to follow the U.S. in adopting protective measures.

2. China's strategic resilience

• Market and industrial advantages: China's super-large market (with a total retail sales of social consumer goods of 47 trillion yuan in 2023) and complete industrial chain (accounting for 30% of global manufacturing) provide a buffer for countermeasures.

• Deepening international cooperation: Expanding emerging markets through the "Belt and Road Initiative" (e.g., ASEAN's trade with China continues to increase), diversifying dependence on the U.S.

4. Controversies and reflections

1. The game of "follow-up" and "restraint"

Some viewpoints suggest that the U.S. has set a trap for "inducing China to escalate," and that if China continues to impose reciprocal tariffs, it may fall into a war of attrition. However, China's choice to follow suit is both a response to domestic public opinion and a way to take the initiative through precise countermeasures (such as rare earth controls).

2. The way out of long-term games

China emphasizes "resolving differences through equal dialogue" in its countermeasures, indicating that there is still room for negotiation. In the future, compromises may be sought through multilateral platforms such as the G20 or by leveraging domestic economic pressures in the U.S. (such as $36 trillion in national debt and high inflation) to force concessions from the U.S.

Conclusion

China's countermeasures are a necessary means to uphold the multilateral trading system and defend national interests, but there is also a need to be wary of the spillover effects of the trade war. The key to the current game lies in how to balance short-term countermeasures with long-term strategic interests, while also promoting the global supply chain to be restructured in a fairer and more sustainable direction.