While world braces for reciprocal tariffs, China awaits Trump report for trade deal

As Donald Trump’s April 2 “Liberation Day” for announcing “reciprocal” tariffs nears, Beijing braces for a potential escalation in its trade tensions with Washington. Five years after Xi Jinping struck his first trade deal with Trump, U.S. officials are set to deliver their assessment of China’s compliance with the “Phase One” agreement, a review that could heighten economic friction.

By Tuesday, American officials must submit their findings on China’s fulfillment of its commitment to buy an additional $200 billion in US goods—a target that official data shows was missed. The report will also examine broader trade issues including whether to revoke China’s normal trade status, a move that economists equate to imposing a 30% tariff.

Trump has sent mixed signals on trade policy. While he has repeatedly decried the trade deficit and floated tariffs of up to 60% on Chinese imports, he has also hinted at lowering duties as part of a broader negotiation over the sale of Chinese-owned social media platform TikTok.

America first trade policy review: What’s at stake for US-China trade

The America First trade policy review ordered by Donald Trump on his first day back in office may set the stage for negotiations on the future of the $690 billion US-China trade relationship. However, it remains unclear whether US officials will release their findings publicly or present them privately to the White House, with recommendations influencing future tariff and trade policies.

“He’ll use the review results as a threat to impose more tariffs on China,” He Weiwen, a former commercial counsellor at Chinese diplomatic missions in New York and San Francisco told Bloomberg. He warned that revoking China’s permanent normal trade status would be “enough to kill trade.”

The review is one of several critical decisions on the horizon that could redefine US-China relations.

Trump-Xi stalemate: Trade talks stall as tensions rise

Trade negotiations between Beijing and Washington remain stalled at lower levels with Chinese President Xi Jinping yet to engage directly with US President Donald Trump. Despite Trump’s repeated willingness to talk, tensions have escalated over US accusations that China is failing to curb fentanyl smuggling—an issue Trump has cited in past tariff hikes.

The standoff extends beyond trade. Beijing is reportedly preparing to block new deals with the family of CK Hutchison Holdings Ltd.’s founder after US pressure forced the Hong Kong conglomerate to sell its Panama ports, Bloomberg reported. Such a move could challenge Xi’s efforts to present China as a stable global partner—a message he reinforced in a rare meeting with international CEOs last week.

Meanwhile, ByteDance’s TikTok remains another flashpoint. Public bidders include billionaire Frank McCourt and Reddit co-founder Alexis Ohanian, but Beijing’s approval is required, particularly given the platform’s prized algorithm.

Chinese president has instructed officials to “keep calm” as trade tensions unfold, opting for a calibrated tariff response to avoid exacerbating economic struggles, including a property crisis and deflation. This contrasts with U.S. allies like Canada and the EU, which have pledged retaliatory measures against Trump’s tariffs.

China Warns US on reciprocal-tariff reprisal

Chinese officials warned US trade chief Jamieson Greer in a call last week that Beijing will “resolutely retaliate” if Trump proceeds with his reciprocal trade measures. This sets the stage for tense discussions when senior Chinese officials travel to Washington for the annual International Monetary Fund and World Bank meetings this month, their first in-person talks with the Trump administration.

If the US wants to discuss cooperation with China, mutual respect is a prerequisite, the account Yuyuan Tantian said in a post on Weibo.

The US also added dozens of Chinese entities to its export restriction list on Tuesday, further ratcheting up tensions with Beijing. China has responded to US tariffs by targeting some US imports including coal, liquefied natural gas, and agricultural products with up to 15% duties.

Asia’s economic powers join forces to counter US tariffs

China, Japan and South Korea agreed to jointly respond to U.S. tariffs, a social media account affiliated with Chinese state media said on Monday, an assertion Seoul called “somewhat exaggerated”, while Tokyo said there was no such discussion.

The state media comments came after the three countries held their first economic dialogue in five years on Sunday, seeking to facilitate regional trade as the Asian export powers brace against U.S. President Donald Trump’s tariffs.

Japan and South Korea are seeking to import semiconductor raw materials from China, and China is also interested in purchasing chip products from Japan and South Korea, the account, Yuyuan Tantian, linked to China Central Television, said in a post on Weibo.

All three sides agreed to strengthen supply chain cooperation and engage in more dialogue on export controls, the post said.

Beijing, Seoul and Tokyo are major U.S. trading partners, although they have been at loggerheads amongst themselves over issues including territorial disputes and Japan’s release of wastewater from the wrecked Fukushima nuclear power plant.

With inputs from agencies