Chongqing - According to Xinhua, China raised the additional tariffs on products imported from the United States to 125 percent, effective from Saturday, the Customs Tariff Commission of the State Council announced Friday.
The announcement follows the U.S. move to raise the "reciprocal tariffs" on Chinese imports to 125 percent.
At the 2025 Chongqing City Value Promotion Conference on April 9, Ou-Yang Hui, Dean’s Distinguished Chair Professor of Finance and Senior Associate Dean at Cheung Kong Graduate School of Business, introduced a strategy to guide Chinese enterprises through the complexities of the ongoing U.S.-China trade war—highlighting a shift in global engagement amid mounting geopolitical tensions.
Chinese firms should prioritize client-centric global expansion
Ou-Yang emphasized that Chinese companies should shift their overseas expansion strategies from merely circumventing U.S. tariffs to a more customer-centric approach. "Rather than solely focusing on avoiding tariffs, companies should concentrate on maintaining existing clients, following market demands, and exploring new markets," he explained.
Ou-Yang Hui, Dean's Distinguished Chair Professor of Finance and Senior Associate Dean at Cheung Kong Graduate School of Business (CKGSB), delivered a speech on April 9. (Photo/Chen Zhan)
Ou-Yang explained that "maintaining existing clients" means Chinese companies can invest in the U.S. by setting up factories or acquiring local brands. For instance, BYD's electric bus plant in California reduces tariffs while securing U.S. government orders. Haier expanded in the U.S. by acquiring GE’s appliance business, gaining access to its brand, channels, and facilities to bypass tariffs and trade barriers.
Meanwhile, "following market demands and exploring new markets" helps mitigate the risks of relying on a single market and reduces dependence on the U.S. The U.S. tariffs pose significant export risks, while consumption in emerging markets like Southeast Asia, Africa, and Latin America is rapidly growing.
Southeast Asia is becoming a hotspot for manufacturing and consumption, while Africa and South America are seeing rising demand for infrastructure and consumer electronics. For example, Xiaomi has built strong sales channels and production bases in India, surpassing Samsung to become the leading smartphone brand in the market.
In the future, Chinese companies must adopt a more flexible approach, combining two strategies: optimizing global supply chains, enhancing product value, and localizing operations to build long-term competitiveness in international markets.
China urged to foster growth by advancing key emerging sectors
According to Ou-Yang, this trade war differs significantly from the one in 2018. "Trump's tariff policy this time is not only targeting China; it's part of a broader global tariff increase," he said. He pointed to examples such as the 25% tariff on traditional trade partners like Canada and Mexico and steep increases for countries like Cambodia (49%), Vietnam (46%), and Thailand (36%).
He also explained that the root cause of the trade war lies in the U.S.'s long-standing trade deficit and the shrinking share of its economy tied to manufacturing. "The U.S. has the largest trade deficit in the world, which has remained above $1 trillion since 2021," Ou-Yang stated. "In 2023, the U.S. manufacturing sector accounted for just 10.2% of GDP, with a heavy reliance on imports for commodity consumption."
Ou-Yang pointed out that countries with significant trade surpluses with the U.S., such as China and the European Union, are the hardest hit by these reciprocal tariffs. Southeast Asian countries, particularly Thailand, Laos, and Vietnam, have been especially affected by high tariff rates, which disrupt their re-export trade.
In terms of economic strengths, Ou-Yang observed that U.S. technology companies are the main drivers of profit, while stressing the importance of technological innovation in shaping China's future competitiveness.
"China needs to develop new quality productive forces by focusing on local conditions, cultivating fresh growth momentum, and strengthening supply systems in emerging sectors like new-generation information technology, AI, aerospace, new energy, advanced materials, biomedicine, and quantum technology," he advised.
Given the current global economic landscape, Ou-Yang emphasized that Chinese companies should prioritize the quality of earnings, cash flow, and effective liability management over merely pursuing revenue growth, scale, or diversification. He argued that this approach would be the most prudent way to navigate the complexities of the ongoing trade war.