Chongqing—The Trump administration has used tariffs to rebalance US-China trade relations. Further policies are in the pipeline, including threats to revoke China's most-favored-nation status and impose additional sanctions on Chinese companies.
This opinion was shared by Wu Yu, deputy director of the Asia-Pacific Research Center at Southwest University of Political Science and Law, during a recent interview with Bridging News.
US President Donald Trump. (Photo/China Daily)
US President Donald Trump quickly launched his tariff agenda upon taking office in keeping with his campaign promise. For imports from China, an extra 10 percent tariff was introduced on top of the existing ones, and the de minimis exemption for Chinese products was revoked, only to be restored.
As a result, Chinese companies are expected to intensify competition within the domestic consumer market to offset losses from reduced exports to the US, which will also drive them to enhance internal momentum in areas like technology and consumer experience, ultimately improving domestic consumer welfare, said Wu.
Wu pointed out that the increase in US tariffs will likely cause a short-term shift in China's export industry. Other markets, such as Southeast Asian countries, will replace China in certain sectors, such as light industry and electromechanical products. This intensifies the urgency for Chinese companies to accelerate transformation and upgrading.
Wu Yu, Deputy Director of the Asia-Pacific Research Center at Southwest University of Political Science and Law, conducted classes on international relations. (Photo/Wu Yu)
Chinese companies’ strengths—such as a strong industrial chain and innovation capabilities—will help them adapt despite US tariffs. In response, they will likely focus on boosting international competitiveness through brand expansion, risk management, and diverse partnerships.
Wu believes the new round of tariff policies presents significant challenges for China. Domestically, China must expedite the implementation of a national industrial security strategy, prioritizing industrial security as a key element of economic security. This will support the development of an independent, secure, and reliable industrial and supply chain.
Externally, China should steadily expand institutional openness in rules, regulations, management, and standards and take a more active role in global economic governance reform.
"The reshaping of the global supply chain is fundamentally a new competition among nations for international market dominance amid a new wave of technological revolution and industrial transformation," Wu explained. "This will lead to a redistribution and rebalancing of the global market among major economies, such as China and the U.S."
A cargo ship full of containers is seen at the port of Oakland as trade tensions escalate over US tariffs, in Oakland, California, US, February 3, 2025. (Photo/China Daily)
Wu added that under these circumstances, Chinese companies should proactively adapt to and even lead the new technological revolution and industrial transformation. They should strengthen technological leadership and innovation-driven development based on industry characteristics and build differentiated competitive advantages within supply chains to create new development opportunities.
Regarding future Sino-U.S. relations, Wu predicted that the two countries will eventually reach a strategic stalemate. The US will likely magnify its existing strategic advantages, injecting more uncertainty and instability into the Chinese economy and its enterprises.
On the one hand, Chinese firms should prepare for tariff and non-tariff barriers. For example, they gradually withdrew some of their market share from the US and sought new opportunities in Europe, ASEAN, Central Asia, the Middle East, and other regions. This will help diversify markets and increase the resilience of exports to the US.
On the other hand, they should continue to develop steadily within the large Chinese market or other relatively mature markets, enhancing competitiveness and buying time for eventual reentry into the US market.