Why China has not retaliated more in Donald Trump trade spat
China has, as expected, hit back at Donald Trump’s imposition of a 10% tariff on its exports to the United States.
Beijing has slapped levies of between 10-15% on a range of energy products that imports from the US.
But what has surprised observers – particularly when Mr Trump kicked off the trade war over the weekend – has been the president’s comparatively lenient treatment of China and, moreover, Beijing’s calm response.
While America’s two closest neighbours, Canada and Mexico, were hit with 25% tariffs (falling to 10% for Canadian energy exports) – since put on ice – China was merely hit with a 10% levy.
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That struck many observers as curious since China is regarded as a bigger trade adversary by the US than Mexico and Canada, with the latter traditionally seen as a close friend to the US, particularly through the pair’s involvement in the ‘Five Eyes’ security alliance along with Australia, New Zealand and the UK.
The big question raised by this is what motivated Mr Trump to do this.
The thinking is that the president was trying to bring China to the negotiating table and that, by initially hitting a close ally like Canada harder, he was trying to send a message to China’s leaders as to what they might face further down the line.
That impression was reinforced by Mr Trump’s overnight description of his 10% tariff on China as an “opening salvo”.
Why is China so calm?
That is not the only curiosity concerning this affair.
The other is the relatively calm response from Beijing. While Canada immediately responded with retaliatory measures and Mexico indicated that it would, China merely murmured in the first instance about taking “necessary countermeasures” and indicated that it would raise a complaint about the US with the World Trade Organisation.
Since then, Beijing has of course hit back with tariffs of its own on US energy imports, as well as launching an antitrust investigation into Google and adding the parent company of Tommy Hilfiger and Calvin Klein on a blacklist of “unreliable entities”.
That gives Chinese president Xi Jinping something to take back off the table if, as expected, he speaks to Mr Trump in coming days as the pair seek to de-escalate this row.
But it all feels relatively restrained and raises the question of why China has responded in this way.
There is certainly a view in Beijing that, with Mr Trump’s first moves, China got off rather lightly compared with the Canadians and Mexicans.
That sanguine response may also indicate that Beijing knows it has other weapons it can deploy other than retaliatory measures.
Cards in China’s back pocket
For a start, China owns $769bn worth of US Treasury bonds. Dumping some of those aggressively – while hurting the Chinese – would push up America’s implied borrowing costs.
Alternatively, Beijing could allow its currency, the renminbi, to weaken on the foreign exchange markets, just as it did during Mr Trump’s first term of office.
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Trump tariffs: What is America’s trade position?
Either way, Mr Trump’s latest measures are unlikely to change the way Chinese businesses operate, particularly the country’s manufacturers.
They have become accustomed over several years, dating back to Mr Trump’s first term, to aggression from the US. They have adapted the way they do business accordingly, for example by shipping a lot of their exports to the US via third countries, most notably Vietnam.
Chinese businesses relieved
Even Chinese companies specifically targeted by Mr Trump – the e-commerce giants Temu and Shein – may not be too badly affected.
They were both singled out as the president closed the so-called “de minimis” loophole, dating back to 1938, which allows goods worth less than $800 to be sent directly to US consumers without incurring import duties or rigorous customs inspections.
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This has been a constant thorn in the side of US retailers and its removal helps explain why, for example, shares of Walmart were on Monday spared the spanking meted out to other US stocks.
Yet Shein and Temu are said to be taking the news calmly.
They may even be calculating that this is a short-term squall that will soon blow over – or calculating that, such is the enormity of their buying power and supply chains, they can simply ship inventory elsewhere in the meantime or even just warehouse it.
It is also worth noting that Shein, having been banned by India in 2020, has just begun selling in the country again.
Overall, then, Chinese businesses have reacted with relief to what has happened. They know it could have been worse.
It explains why, even though the Chinese economy is presently misfiring, the authorities in Beijing have reacted relatively calmly to what Mr Trump has done.
Former US president Joe Biden has prostate cancer, his office has said.
The statement said Mr Biden, who left the White House in January, is reviewing options for treatment with his physicians.
It read: “Last week, President Joe Biden was seen for a new finding of a prostate nodule after experiencing increasing urinary symptoms.
“On Friday, he was diagnosed with prostate cancer, characterised by a Gleason score of 9 (Grade Group 5) with metastasis to the bone.
“While this represents a more aggressive form of the disease, the cancer appears to be hormone-sensitive which allows for effective management.
“The President and his family are reviewing treatment options with his physicians.”
File pic: Reuters
According to Cancer Research UK, a Gleason score of 9 means the cancerous cells “look very abnormal” and the disease is “likely to grow quickly”.
A source familiar with Mr Biden and his family’s thinking has told Sky’s US partner network, NBC News, that the former president is considering “multiple treatment options” – including hormone treatment for the cancer.
They added he is at his home in Wilmington, Delaware, and that as of now, it is unclear where the former president will be treated.
Mr Biden, 82, was the oldest person to ever serve as president, with concerns about his health raised regularly during his campaign for re-election last year.
After a poor debate against Donald Trump in June, he withdrew from the 2024 election and endorsed his vice president Kamala Harris.
In February 2023, he had a skin lesion removed from his chest that was a basal cell carcinoma, a common form of skin cancer.
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A Mexican navy ship has hit the Brooklyn Bridge during a promotional tour in New York City.
The New York Fire Department said authorities were responding to injuries but had no details about how many people might have been hurt or whether they were on the vessel or on the bridge.
Sky’s US partner network NBC News reports that at least three people were seriously injured in the incident.
The Mexican navy said in a post on X that the Cuauhtemoc, an academy training vessel, was damaged in the accident, which has prevented it from continuing its voyage.
Eyewitness video of the collision posted online showed the mast of the ship, which was flying a large Mexican flag, scraping the underneath of the bridge.
Pic: AP
The vessel then drifted toward the edge of the river as onlookers scrambled away from shore.
The Mexican navy said the status of personnel and material was under review by naval and local authorities, which were providing assistance.
The Cuauhtemoc is about 297ft long and 40ft wide, according to the Mexican navy. It sailed for the first time in 1982.
Pic: AP
Each year, it sets out at the end of classes at the naval military school to finish cadets’ training.
It left the Mexican port of Acapulco, on the Pacific coast, on 6 April with 277 people onboard, the navy said at the time.
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One person has died in a bomb explosion near a reproductive health clinic in California, authorities have said.
The incident took place in Palm Springs, a city two hours east of Los Angeles, and is being investigated as a possible car explosion.
The city’s mayor Ron DeHarte said one person died in the blast, adding that the bomb was “either in or near” a vehicle. The deceased’s identity is not known, Palm Springs police said.
Dr Maher Abdallah, who runs the American Reproductive Centers clinic, told the Associated Press his facility was damaged but all staff were safe and accounted for.
The explosion damaged the office space where the practice conducts patient consultations, but the IVF lab and stored embryos were unharmed, he added.
“I really have no clue what happened,” he said. “Thank God today happened to be a day that we have no patients.”
Debris covers the ground after the explosion. Pic: ABC7 Los Angeles/AP
In a statement posted on Facebook the clinic said it was “heartbroken” to learn someone died in the explosion and added: “Our deepest condolences go out to the individuals and families affected.”
It continued: “Our mission has always been to help build families, and in times like these, we are reminded of just how fragile and precious life is.
“In the face of this tragedy, we remain committed to creating hope – because we believe that healing begins with community, compassion, and care.
The clinic will be fully operational on Monday, it added.
“This moment has shaken us – but it has not stopped us. We will continue to serve with strength, love, and the hope that brings new life into the world,” the statement concluded.
Pic: ABC7 Los Angeles/AP
The Palm Springs city government said in a post on Facebook that the explosion happened on North Indian Canyon Drive, near East Tachevah Drive, before 11am local time (6pm GMT).
A burned-out car can be seen in a parking lot behind the building in aerial footage.
The blast caved in the clinic’s roof and blew debris across four lanes of the road.
Another person said he was inside a cannabis dispensary nearby when he felt a massive explosion.
Nima Tabrizi said: “The building just shook, and we go outside and there’s massive cloud smoke.”
Investigators from the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives are travelling to the scene to help assess what happened.
California governor Gavin Newsom has been briefed on the explosion, his press office said.
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