Trade War Monitor, April 21: China Rallies Support for Exporters to Better Weather Tariff Storm

China is rapidly adapting to an escalating and potentially prolonged trade war with the United States, turning to its large domestic market as a buffer for its foreign trade businesses [para. 1]. For several years, Chinese authorities have promoted the integration of domestic and foreign trade, launching pilot programs in major cities like Shanghai. These pilot programs, set to conclude in 2025, now serve as strategic preparations for dealing with the current wave of U.S.-imposed tariffs [para. 2]. The Chinese government is closely supporting export-reliant firms, offering flexibility on loan repayments and other transitional measures similar to those used successfully in the past [para. 6][para. 7]. At the same time, efforts are underway to accelerate the creation of a unified national market, reduce harmful domestic competition, and enhance international cooperation to secure access to broader global markets [para. 8].

Amid these tensions, Nvidia CEO Jensen Huang visited Beijing for talks with Ren Hongbin, head of the China Council for the Promotion of International Trade. During this rare high-level meeting between a major U.S. tech executive and Chinese authorities, Huang reaffirmed Nvidia’s strong commitment to the Chinese market, despite tighter U.S. export controls on advanced AI chips [para. 3][para. 10][para. 11]. He indicated that Nvidia would persist in collaborating with Chinese partners, customizing product offerings as necessary to comply with export regulations [para. 12]. However, Huang admitted that U.S. restrictions, particularly the indefinite export ban on its H20 chip, have significantly impacted Nvidia’s business in China. Despite these challenges, Huang emphasized the mutually beneficial growth experienced by both Nvidia and China, reiterating the company’s intention to serve the Chinese market steadfastly [para. 13].

The aviation industry has emerged as another focal point in the trade conflict. According to U.S. President Donald Trump, China has "reneged" on a major purchase of Boeing aircraft, halting delivery of jets worth hundreds of millions of dollars [para. 14][para. 15][para. 16]. Media reports indicate that the Chinese government ordered airlines to stop taking further deliveries of Boeing jets, and Juneyao Airlines delayed acceptance of a Boeing 787-9 Dreamliner valued at $120 million [para. 16].

The medical technology sector is also experiencing varied impacts from the trade standoff. While U.S. exports of medical consumables to China mainly target fields like orthopedics, neurology, and neurosurgery, Chinese hospitals increasingly substitute imported orthopedic devices with domestic alternatives [para. 17]. However, over 70% of the market for neurological intervention devices remains dominated by U.S.-made products, including crucial items such as stents and specialized imaging tools [para. 18].

Experts argue that redirecting Chinese exports to the domestic market could temporarily cushion the impact of U.S. tariffs, but lasting resilience will depend on boosting domestic consumption. This would require improvements in social security, increased incomes, and accelerated urbanization [para. 19]. Programs providing subsidies for consumers to buy items like electric vehicles and appliances are temporary measures [para. 20]. Some suggest devaluing the yuan to help exporters, but leading economists say such a move would be ineffective in the current context [para. 20]. [para. 19][para. 20].