Abhishek G BhayaBeijing has announced retaliatory tariffs of 125 percent on American goods in response to US President Donald Trump hiking tax on Chinese imports to a staggering 145 percent — marking the third hike since the ‘Liberation Day’ announcement.
While the economic standoff between the world’s two largest economies has raised fears of a prolonged trade war, a veteran Chinese policy advisor emphasised that Beijing is simply standing its ground with measured restraint.
“As the second-largest economy, China had no choice but to respond to Trump’s tariffs – Beijing doesn’t like to be bullied,” said Henry Huiyao Wang, founder and president of the Center for China and Globalization (CCG) and former Counselor to China’s State Council – the country's highest administrative authority, overseeing various ministries and agencies to implement national policies and manage government affairs.
“But we still hope that dialogue, discussion, and sincere consultation can help resolve the differences — just like we managed to do during Trump’s first term,” he told TRT World on the sidelines of the Antalya Diplomacy Forum 2025 on Friday.
However, Wang also appeared convinced that the current escalation has likely peaked.
“I think the tariff escalation has ended now,” he said, citing a recent announcement by China’s Ministry of Commerce that Beijing would not retaliate further, even if Washington were to push its tariffs higher.
“China already announced they’re not going to increase the tariff again… They will not follow that again.”
“The successive imposition of excessively high tariffs on China by the US has become nothing more than a numbers game, with no real economic significance,” a spokesperson for China’s Commerce Ministry said in a statement on Friday.
“It merely further exposes the US practice of weaponising tariffs as a tool for bullying and coercion, turning itself into a joke,” the spokesperson added.
Wang denounced the tit-for-tat approach as “counterproductive” and misaligned with the needs of a globalised world.
“Trade is beneficial to both the US and China, and to the world. This is not just a bilateral issue — it has global ramifications,” he said, pointing to similar US trade actions against other partners, including Mexico, Canada, and the European Union.
“China, as one of the largest economies and a permanent member of the United Nations, has a responsibility to stand up for fair trade and multilateralism,” Wang said, adding that Beijing had already lodged a complaint with the World Trade Organization (WTO) dispute settlement mechanism.
Despite the optics of confrontation, Wang believes the situation has not yet crossed the point of no return.
“This [tariff increase] almost means decoupling on trade. But even the Trump administration has said again and again — they don’t want to decouple from China or stop China’s development,” he said. “So now the question is: how do we get out of this escalation?”
The answer, Wang argued, lies in diplomacy — and a dose of pragmatism.
Trump says he would "love" to strike deal with China as world's top two economies engage in an intensifying trade war that has global markets on edge.
Negotiations still on the table
While Beijing has had to respond to what it views as “bullying” tactics, Wang emphasised that China remains open to negotiations.
“China’s door for dialogue is wide open,” he said, stressing that high-level diplomacy is essential.
He pointed to the Trump administration’s Phase One trade deal as an example of what’s possible through talks. “Even during the first Trump term, after a period of tariff escalation, both sides came to the table and signed agreements.”
Wang suggested a revival of such exchanges, including visits by the US secretary of commerce or the US trade representative to China, or invitations to Chinese counterparts to Washington. “This is the time for communication and consultation — not confrontation,” he said.
Late Friday, the White House announced that Trump remained optimistic about securing a trade deal with China. “The president has made it very clear that he’s open to reaching an agreement with China,” White House Press Secretary Karoline Leavitt said during a press briefing. “But if China continues to retaliate, it won’t be in their best interest,” she added.
Wang suggested that the intention behind Trump’s tariffs, in the first place, were to use it as a bargaining chip for negotiations.
“Trump is a pragmatic businessman, He has said good things about China in the past. He admired Chinese leadership and emphasised that if China and the US work together, nothing in the world is unsolvable.”
Wang also noted Trump’s early efforts to build ties with China, including inviting President Xi Jinping to his inauguration which was attended by Chinese Vice President Han Zheng. “But now, of course, he has a domestic political audience. He doesn’t want to lose face.”
He added that Washington’s need for Beijing’s cooperation on broader international issues — such as the Ukraine war, Middle East tensions, and North Korean denuclearisation — could provide additional leverage for renewed dialogue.
Wang is hopeful. “Trump wants deals — on TikTok, on fentanyl, maybe even on peace. He once called himself the president of peace. So there’s room to talk.”
Will China sell US sovereign bonds?
Among the more dramatic scenarios floated by some analysts is the possibility of China retaliating by dumping US Treasury holdings, which would put pressure on the US dollar and global markets.
Wang, however, dismissed this as unlikely and unnecessary. “China is still quite reserved. It’s not escalating further,” he said. While acknowledging that Beijing holds about $800 billion in US Treasuries, Wang pointed out that these holdings are mutually beneficial.
“China is basically financing the US deficit. That’s doing a lot of good for the US,” he said.
In his view, Washington’s trade war misses the bigger picture: “It’s short-sighted to focus only on manufacturing. The US moved out of heavy industries years ago for reasons like pollution, labour cost, and environmental concerns. To now wage a trade war to bring that back doesn’t make economic sense.”
He emphasised that “trade wars benefit nobody”.
“We need to come back to the negotiating table, because the costs of not doing so are just too high — not only for the US and China, but for the entire world economy.”
