Trade War Monitor, April 15: U.S. and China Trade Barbs, Fall Short of ‘Mutual Respect’ for Talks

The U.S.-China trade tensions persist, as officials on both sides engage in heated rhetoric over tariffs and broader bilateral relations. Despite the recognition that tit-for-tat tariff hikes are unsustainable, there is an understanding that negotiations for a new trade agreement will be necessary in the future [para. 1]. In Hong Kong, Xia Baolong, a senior official with the Communist Party, criticized the U.S.'s 145% tariff on Hong Kong imports as "outrageous bullying" during a national security speech. He also condemned U.S. Vice President J.D. Vance's derogatory remarks about the Chinese, emphasizing China's long-standing civilization in response. Hong Kong, distinct from mainland China, operates a "zero tariff" policy and has been the U.S.'s largest trade surplus region over the past decade, accumulating $271.5 billion in surplus [para. 2][para. 8].

The Chinese embassy in Argentina also reacted strongly to U.S. Treasury Secretary Scott Bessent, who accused China of fostering a "debt trap" in developing countries. Bessent criticized China’s financial engagements in Argentina as exploitative while presenting the U.S. as a more dependable partner. China rejected these claims, accusing the U.S. of malicious slander and obstructionist tactics in the developing world [para. 3].

Amid these exchanges, discussions for renewed relations remain strained. The former Chinese Vice Finance Minister Zhu Guangyao emphasized the need for mutual respect before meaningful dialogue could occur, referencing previous diplomatic confrontations where China resisted external pressure from the U.S. [para. 4][para. 5].

President Xi Jinping, during a state visit to Vietnam, signaled China's intent to promote multilateralism and oppose protectionism. Xi called for enhanced economic ties between China and Vietnam to facilitate smoother trade flows and ensure a balanced globalization. The visit follows the U.S.’s recent 46% import tariff on Vietnamese goods. While U.S. President Donald Trump criticized growing collaboration between China and Vietnam, he stated he did not fault them for seeking mutual benefits [para. 6].

Senior Communist Party official Xia Baolong's aggressive stance over the U.S.'s Hong Kong tariffs re-emerged, reiterating his denunciation of the tariffs and highlighting the city’s tariff-free trade benefits, contrasting with Washington's high surplus in bilateral trade with Hong Kong [para. 8].

In response to rising tariffs, Chinese companies like Contemporary Amperex Technology Co. Ltd. (CATL) are mitigating potential impacts through strategic adjustments. While CATL, known for its EV and energy storage batteries, has been impacted by recent U.S. policy measures, its limited exposure to American markets and focus on partnerships in Europe, the Middle East, and Australia have shielded it significantly. Notably, CATL has faced political scrutiny in the U.S. for supplying battery technology to Ford for a new factory in Michigan [para. 9].

Chinese wearable tech companies are also exploring solutions amid escalating trade tensions. At Hong Kong’s InnoEX tech fair, leaders from the industry highlighted their pivot towards overseas manufacturing and innovation to sustain competitiveness. With U.S. reciprocal tariffs on Chinese goods set to increase further, including eventual targeting of electronics, firms are racing to explore offshoring production as a means to maintain pricing and market share [para. 10][para. 11].

As U.S.-China economic relations grow increasingly adversarial, key industries in China continue to adapt to shifting trade policies while the broader geopolitical rivalry fuels tensions. Observers anticipate significant outcomes from ongoing developments in this economic conflict [para. 1][para. 7][para. 12].