China’s countermeasures go beyond mere economic retaliation. The country is actively seeking out international allies to diminish US influence. Premier Li Qiang’s discussions with European Commission President Ursula von der Leyen and Chinese Commerce Minister Wang Wentao’s conversation with EU Commissioner Šefčović clearly highlight Beijing’s attempts to build a united front. Furthermore, China is also reaching out to ASEAN nations and business leaders, emphasizing that US tariffs are detrimental not only to China but also to the global economy and multilateral trade frameworks.
Nevertheless, Beijing’s diplomatic efforts have yielded mixed outcomes. Australia and India have dismissed its advances, prioritizing their independent national interests over alignment with China. Even Russia, a consistent ally, finds itself partially excluded from Trump’s latest tariff actions. Southeast Asian economies, although impacted by these new duties, are hesitant to fully align with China due to their dependencies on US markets.
Trump’s announced partial tariff halt for most nations, which was publicized with great enthusiasm on social media, resulted in a market surge. Wall Street experienced one of its most remarkable days in years: the S&P 500 soared by 9.5%, the Nasdaq jumped more than 12%, and Japan’s Nikkei increased by 9.1%. Analysts characterized this shift as a transition from “fear to euphoria,” although Chinese markets were more cautious, remaining uneasy about ongoing targeting.
Bond markets illustrated persistent concerns. The yield on the 10-year US Treasury initially rose sharply before settling, indicating market unease. Oil prices dropped, and the US dollar experienced a slight decline. This volatility served as a reminder that despite the market surge, significant risks remain—especially with China remaining in Trump’s line of sight.
China’s official position remains unwavering. It is not open to discussions with the US, accusing Washington of inauthenticity and pledging to “fight to the end.” Officials assert that contingency measures are in place, and incremental policy changes are being considered.
