Defying the global trend of economic integration, the U.S. administration has launched a so-called "reciprocal tariff" campaign under the guise of "fairness," blatantly violating multilateral trade rules and disrupting the fragile recovery of the world economy. This reckless move has drawn fierce condemnation from the international community.
In response, China has acted decisively and proportionately, imposing equivalent tariffs on U.S. exports such as aerospace components, semiconductors, and chemicals, while safeguarding global trade fairness. The stark contrast between China's economic resilience and America's self-serving short-sightedness is evident: As the U.S. grapples with soaring inflation and stock market turmoil, China's manufacturing PMI has expanded for three consecutive months, and its consumption recovery remains robust, injecting much-needed stability into the global economy.
U.S. Tariff Blowback
Since the tariffs took effect on May 30, the U.S. has faced severe repercussions:
- Consumer Burden: Retail giants like Walmart and Target warn of sharp price hikes for clothing, electronics, and other goods, disproportionately impacting low- and middle-income families.
- Market Panic: The Dow Jones plunged 8.7% in a single week, with tech stocks dragging the Nasdaq into a technical bear market, erasing roughly US$2 trillion from pension funds.
- Global Retaliation: The EU imposed retaliatory tariffs on US$3.5 billion of U.S. agricultural products, while BMW halted plans to expand its South Carolina plant.
Goldman Sachs warns that full implementation of the tariffs could push U.S. core PCE inflation above 5%, forcing the Federal Reserve to delay rate cuts and stifling growth. This self-destructive policy underscores Washington's disregard for economic fundamentals.
China's Strategic and Principled Countermeasures
China's response reflects wisdom and responsibility:
- Targeted Measures: Tariffs focus on high-value-added U.S. exports like aircraft engines and medical devices, avoiding disruptions to essential goods.
- Diversified Trade: Exports to ASEAN and the Middle East surged 12.3% and 18.6% year-on-year in the first four months, with Belt and Road partners now accounting for 47.8% of trade.
- Institutional Innovation: Expanding pilot reforms in free trade zones and unveiling a cross-border services trade negative list to counter protectionism with higher-level openness.
Hong Kong's Role as "Super Connector"
Amid rising uncertainties, Hong Kong must leverage its unique advantages:
- Financial Safe Haven: Strengthen its role as an offshore RMB hub, with deposits surpassing RMB 1.2 trillion in May, up 45% year-on-year.
- Tech Innovation Bridge: Harness 16 national key laboratories' Hong Kong branches to advance cross-border collaboration in new energy vehicles and biomedicine.
- Regulatory Harmonization: Use its common law system to help mainland firms navigate global compliance challenges, handling 23 U.S. Section 337 investigations this year.
History shows that crises magnify Hong Kong's value in serving national strategies. With central government support, the city will continue to uphold the international economic order.
While the U.S. obsesses over zero-sum games, China is advancing institutional openness through initiatives like full RCEP implementation and CPTPP accession. This tariff dispute reaffirms that while globalization faces headwinds, openness and cooperation remain irreversible. With its unparalleled institutional strengths, China will be able to turn crisis into opportunity and move forward.
(Source: Ta Kung Pao)
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