Research & Analysis

Following President Donald Trump’s announcement of “reciprocal tariffs” on April 2, China swiftly responded with a broad package of retaliatory tools targeting US trade and investment.

President Donald Trump on Wednesday unveiled his reciprocal tariff plan, which imposes a 10% baseline tariff on most countries and much higher tariffs on certain trading partners, including a 34% rate for China that will go into effect at midnight on April 9.

President Donald Trump suggested this week that next week’s reciprocal tariff announcement may be more narrow than first portrayed. He noted that the tariffs will “be more lenient than reciprocal,” with some exceptions and the possibility that not all tariffs will be announced on April 2.

Nearly two weeks since the White House raised the baseline tariff rate on Chinese imports by an additional 10%, US-China diplomatic activity remains in a holding pattern as both governments firm up their respective trade policy agendas.

At the annual two sessions meetings earlier this month, China unveiled its 2025 government budget, detailing its spending priorities for the year. Aligned with the themes of the Government Work Report, which includes the highest projected deficit-to-GDP ratio in three decades, the budget enables greater spending to allow for a more proactive fiscal policy.

President Donald Trump on Tuesday followed through on his threat to increase the baseline tariff rate on all Chinese products from 10% to 20%, effective immediately. The announcement cites China’s inaction to stop the flow of fentanyl precursor chemicals to North America. The administration has not indicated plans for an exclusion process.

On March 5, Premier Li Qiang opened the annual National People’s Congress by delivering the Government Work Report. The report was released in tandem with the National Development and Reform Commission’s draft plan for economic and social development and the Ministry of Finance’s draft central and local government budgets.

The White House last Friday announced the America First Investment Policy, a national security-focused presidential memorandum that promotes investments from allies while restricting investments from adversaries, notably China.

The Trump administration’s approach to trade with China is a tangled web of existing and potential future trade actions. While there has not been a coordinated effort to clarify exactly how the administration will roll out new actions, the threat still looms.