Chinese Media to Trump: 'There Are No Winners in Tariff Wars'

Chinese state media have issued a warning to US president-elect Donald Trump that his planned tariffs will leave ‘no party unscathed’ and that Beijing was prepared to tackle his policies.

Editorials in Chinese communist party mouthpieces China Daily and the Global Times late on Tuesday warned Trump to not make China a “scapegoat” for the US’s fentanyl crisis or “take China’s goodwill for granted regarding anti-drug cooperation”.

The media outlets were referring to Trump’s announcement on Monday that he would impose “an additional 10% tariff, above any additional tariffs” on imports from China until Beijing clamped down on trafficking of the chemical precursors used to make fentanyl.

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The spread of the deadly drug has fuelled tens of thousands of fatal overdoses in the US over the past years, though deaths related to its use have slowed unexpectedly this year.

“The excuse the president-elect has given to justify his threat of additional tariffs on imports from China is far-fetched,” China Daily said.

“There are no winners in tariff wars. If the US continues to politicise economic and trade issues by weaponising tariffs, it will leave no party unscathed.”

The salvo from Chinese media comes as the world’s two biggest superpowers set out their positions ahead of the Trump’s return to the White House.

The former president’s first term resulted in a trade war that uprooted global supply chains and hurt every economy as inflation and borrowing costs shot up.

He is now threatening Beijing with far higher tariffs than the 7.5%-25% levies he imposed on Chinese goods during his first term.

“China already has a template for dealing with the previous US tariff policy,” the Global Times quoted Gao Lingyun, an analyst at the Chinese Academy of Social Sciences in Beijing, as saying.

“Using counternarcotics issues to increase tariffs on Chinese goods is untenable and unpersuasive,” Gao added.

Tough trade talks ahead

During his campaign trail, Trump threatened to impose tariffs of more than 60% on Chinese goods.

That threat is rattling China’s industrial complex, which sells goods worth more than $400 billion annually to the US and hundreds of billions more in components for products Americans buy from elsewhere.

Furthermore, Trump’s chosen trade team — Jamieson Greer as new US trade representative and Howard Lutnick as Commerce Secretary — points to a bruising four years for trade negotiators the world over.

Both those names are hardline China critics, with Greer being a key veteran of Trump’s first-term trade war against China.

Beijing can continue to expect bearing the brunt of Trump’s efforts to bring down the US’s trade deficit and bring about the “manufacturing renaissance” he promised on the campaign trail.

Growth downgrades

All those concerns have led economists to begin downgrading their growth targets for China’s $19 trillion economy for 2025 and 2026.

“For now the only thing we know for sure is that the risks in this area are high,” said Louis Kuijs, chief Asia economist at S&P Global Ratings, which on Sunday lowered its China growth forecast for 2025 and 2026 to 4.1% and 3.8%, respectively.

“What we assumed in our baseline is an across-the-board (tariff) increase from around 14% now to 25%. Thus, what we assumed is a bit more than the 10% on all imports from China.”

China is also far more vulnerable to trade shocks this time around, in light of its dwindling recovery from pandemic-related shocks. Profits at Chinese firms fell 10% year-on-year in October, data showed on Wednesday, pointing to the struggle for companies to remain profitable in the country.

Economists in a Reuters poll said last week they expected additional US tariffs ranging from 15% to 60%. Most said Beijing will need to inject more stimulus to boost economic growth and offset pressure on exports.

“What the future will bring on this front is hard to say,” S&P Global’s Kuijs said. “There are many uncertainties. There is still a large increase to go to get to 60%.”

Reuters, with additional editing by Vishakha Saxena

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]