US response
Trump calls for 'calm'
US President Trump has posted a series of messages on social media to reassure the public, claiming "Calm down! Everything will be fine, and the United States will be stronger than ever!" This statement is seen as a direct response to China's countermeasures, an attempt to ease the domestic market panic caused by the escalation of tariff policies.
Economic pressure is emerging: American companies and consumers will directly bear the cost of tariffs. According to Moody's estimates, the average annual expenditure of American households may increase by $1,300 to $5,000, pushing up the CPI by about 2%, exacerbating the risk of stagflation. The Atlanta Federal Reserve predicts that the US GDP may shrink by 2.4% in the first quarter of 2025.
International response
EU's strong countermeasures
The EU has adopted the first round of tariff countermeasures against the US, imposing a 25% tariff on US goods, and plans to formulate a second-phase response plan. French Minister of Economy and Finance Eric Lombard stressed that the EU's response will be "measured and extremely tough", and warned that US bullying will further tear apart the relationship between Europe and the US.
Multinational joint countermeasures
160 countries including the European Union, Japan and South Korea have complained to the WTO about the US tariff policy, Canada has restricted the import of dairy products, and the spillover effects of the trade war threaten the global economy. The WTO predicts that the US tariff policy may cause the global merchandise trade volume to shrink by 1% in 2025, which is nearly 4 percentage points lower than the previous forecast.
China's Position and Actions
Legal countermeasures
China has responded strongly to the unilateral bullying of the United States in accordance with its national tariff law. The Ministry of Commerce has sued the United States for the latest tariff increase measures under the WTO dispute settlement mechanism, emphasizing that the US actions seriously violated WTO rules and undermined the multilateral trading system.
Multi-dimensional counterattack combination
In addition to imposing additional tariffs, China has also added six U.S. entities to the unreliable entity list, prohibiting them from making new investments in China; and added 12 U.S. entities to the export control list, prohibiting the export of dual-use items to them.
Market and industry impact
US businesses under pressure
The cost of the US automotive and generic drug industries has surged due to their reliance on the Chinese supply chain, and General Motors and Tesla may face layoffs. Farmers in the Midwest have seen their incomes shrink due to the sharp drop in soybean exports, and government subsidies are unlikely to make up for the losses.
China's industrial transformation
China's countermeasures have forced domestic companies to accelerate the development of emerging markets such as the Belt and Road Initiative, and promote the upgrading of high-end manufacturing industries such as clothing branding and semiconductor localization. Although labor-intensive industries such as textiles and furniture have been impacted, the cost-effectiveness of domestic substitutes such as new energy vehicles and domestic milk powder has improved.
Global Governance and Future Prospects
Multilateral mechanisms are challenged
WTO Director-General Ngozi Okonjo-Iweala expressed deep concern about the US tariff policy, fearing that it could escalate into a tariff war and a series of retaliatory measures, leading to a further decline in global trade. Experts from many countries called on developing countries to respond in unity and defend the multilateral trading system.
The need for cooperation and dialogue
China has always stressed that the imposition of tariffs is a passive countermeasure, and urged the US to immediately correct its wrong practices, cancel unilateral tariff measures, and resolve differences through equal dialogue. The international community generally believes that only by abandoning the zero-sum game mentality can the global economic stability and sustainable development be maintained.
The tariff escalation marks a new phase in the Sino-US trade war, and its spillover effects have affected the global industrial chain and the multilateral trading system. In the future, whether the parties can resolve their differences through dialogue and consultation will directly affect the global economic recovery process and the future direction of the multilateral governance system.
