Why China is Urging Nations to Resist ‘Appeasement’ in Trade Deals with Trump

China has issued a stark warning to other countries about making trade deals that favor the United States. This comes amid rising tensions in a trade war that’s impacting both economies.

A Chinese official stated that any country cooperating with the U.S. against China will face consequences. This was sparked by reports that the Trump administration is pushing allies to limit trade with China, potentially to gain leeway for tariff negotiations.

So, what’s behind this heated exchange? What role does China play in global trade today?

The Current Trade Landscape

President Trump has paused some tariffs but has increased duties on China significantly. U.S. tariffs on many Chinese products now stand at 145%, while China retaliated with tariffs of 125% on American goods. Trump maintains that these measures are essential to bring jobs back to the U.S. and help local industries.

Last week, Chinese President Xi Jinping visited Southeast Asian countries, promoting stronger ties and urging against what he called "unilateral bullying." Xi emphasized that no one wins in trade wars, a sentiment echoed by several experts.

Global Trade Dynamics

A report from the Lowy Institute indicates that more than 70% of countries trade more with China than with the U.S. This shift has been on the rise since China joined the World Trade Organization in 2001. Back then, China was still rising, but today it’s a vital trading partner for about 60 countries, nearly double that of the U.S.

Historically, when China entered the WTO, over 80% of nations had more trade with the U.S. By 2018, that number dropped to just 30%. Today, 145 countries trade more with China than the U.S., a clear indication of shifting alliances.

Can Countries Decouple from China?

Experts like Alicia Garcia-Herrero from the investment bank Natixis suggest that cutting ties with China is not feasible for most nations. While Mexico might prioritize its U.S. trade relations, many other countries are too dependent on Chinese imports. The European Union’s trade deficit with China reached 396 billion euros ($432 billion) last year, highlighting its significant role in global supply chains.

The reality is stark. Many nations, including those in the Global South, find it difficult to turn away from China. Any threats to limit trade with China may push these countries further into Beijing’s corner.

Final Thoughts

As countries navigate these tricky waters, the balance of power in global trade continues to shift. The long-term implications of the U.S.-China trade conflict will shape the economic landscape for years to come. Nations must carefully consider their positions, especially in light of the growing importance of Chinese trade.

For further insights, you might want to check out reports from the Lowy Institute, which provide detailed analyses on the evolving dynamics of international trade.

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News, Donald Trump, Explainer, International Trade, Trade War, Xi Jinping, Asia Pacific, China