China calls on Europe to join it in defying US trade aggression
China has matched Trump’s tariff escalation one last time and is now exploring other fronts for fighting its trade war with the US.
Elmat: China tries to seize the opportunity to bring Europe to its side.
Scott Bicheno April 11, 2025
Yesterday, US President Trump rewarded all the countries that didn’t immediately retaliate to the unilateral tariffs announced last week by declaring a 90-day pause on them, while still retaining a baseline 10% tariff on everyone. The exception was China, which had retaliated, and the day ended with a further reraise of US tariffs to reach the absurd level of 145%, effectively rendering imports from China impossible.
China’s tariff like-for-like tariff retaliations have operated at a discount of 20 percentage points as some US tariffs had been imposed previously without such a response. Today, China once more matched the US hike, taking its tariff on US imports to 125%.
According to state-controlled publication Global Times, this will be the last time it does so. Concluding that imports from the US are now also impossible, the Customs Tariff Commission of the State Council doesn’t see any point in raising tariffs further and signalled that it will ignore any US tariff hikes from now on.
So that’s it – trade between the world’s two biggest economies is over, for the time being at least. The EU bloc, viewed as a whole, does have a larger economy than China, and thus is a critical ally of both belligerents in this trade war. In another of its headline-only bulletins, China’s state news agency Xinhua reported “Xi calls on China, EU to jointly resist unilateral bullying”.
That call coincides with the visit of Spanish Prime Minister Pedro Sanchez (pictured above). Xinhua’s report on that visit is headlined “Xi says there is no winner in a tariff war”. There was the usual spin about how bravely defiant China is in the face of unprovoked aggression and no mention, of course, of the extensive protectionism and trading bad faith that is endemic to China. The country even had the nerve to complain to the World Trade Organisation about America’s behaviour.
“[Xi] called on China and the EU to fulfill their international responsibilities, work together to safeguard economic globalization and the international trading environment, and jointly resist unilateral bullying,” says the Xinhua report. “This not only safeguards the legitimate rights and interests of China and the EU, but also serves to maintain fairness and justice within the international community while upholding international rules and order.”
Trump, of course, insists that it’s he who is pursuing fairness by trying to force China to stop “ ripping off” the rest of the world and, while both view themselves as the injured party in this dispute, it’s hard to see any path to compromise and resolution. So long as this situation remains, trade with EU will take on an extra level of importance.
The EU’s top trade representative is reportedly flying over to the US this weekend to see what he has to do to get Trump to chill out, but there will be a limit to his appetite for capitulation. In an interview with the FT, European Commission president von der Leyen reiterated the threat made a week ago by France that the EU would consider new taxes on US Big Tech if the matter remains unresolved.
“We are developing retaliatory measures,” said von der Leyen.” “There’s a wide range of countermeasures…?in case the negotiations are not satisfactory… An example is you could put a levy on the advertising revenues of digital services… It’s a turning point with the United States without any question. We will never go back any more to the status quo.”
China now has tonnes of goods intended to be shipped to the US that are desperately looking for other buyers. That seems like a great opportunity for the EU to negotiate more favourable trade terms with China. The same applies to the UK and just as much so with the US as the UK is also one of its biggest trading partners, in both directions.
While stock and bond markets are still all over the place, Trump’s 90-day pause gives everyone a chance to gather themselves and get their heads around the whole situation. Further escalations by the US on China will apparently be ignored by the latter but it will presumably double-down on its global charm offensive. Anyone who works in diplomacy or trade policy should probably plan to start their summer holiday later than usual this year.
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