Singled out by Trump, China has the ‘leverage to retaliate’ and nothing to lose: analysts

‘Whether the tariff is 70 per cent or even 1,000 per cent makes little difference’ when the result is that it blocks trade with US, says Eurasia Group China director

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China and the US continue to clash with trade tariffs. Photo: Shutterstock

Published: 3:12pm, 8 Apr 2025Updated: 6:38pm, 8 Apr 2025

China is rapidly approaching a point where it will have “nothing to lose” in an ever-intensifying trade war with the US, economists said after US President Donald Trump threatened to slap a further 50 per cent in levies on Chinese imports.

And despite Trump’s hard line, some economists said that China is sure to retaliate, as the marginal economic impact of his fresh threats on China is declining as the effective tariff level quickly builds up.

“Currently, the profit margin for China’s export sector is around 30 to 40 per cent,” said Dan Wang, China director at Eurasia Group. “If the US imposes tariffs exceeding 35 per cent, it would wipe out most of their profits – whether the tariff is 70 per cent or even 1,000 per cent makes little difference, as it essentially blocks China from trading directly with the US.

“China will certainly retaliate; it won’t back down.”

Trump’s warning on Monday threatened to push combined duties on Chinese imports beyond 100 per cent on Wednesday, after Beijing imposed a 34 per cent tariff to match the “reciprocal tariff” that Trump slapped on Chinese imports during his “Liberation Day”.