‘Brace for impact’: Chinese economist warns the gloves are off in US trade war

Mao Zhenhua says China’s swift, forceful response to US tariff increases means the time for reconciliation appears to be over

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Economist Mao Zhenhua has said all parties should “brace for impact” as the US-China trade war intensifies. Photo: Weibo

Published: 5:00pm, 8 Apr 2025Updated: 3:55pm, 9 Apr 2025

With its forceful response to US President Donald Trump’s new tariffs, China has abandoned courtesy, leaving the chances of reconciliation slim as ties between the world’s two largest economies grow increasingly fraught, according to a prominent economist.

“Initially, China opted to maintain some courtesy to avoid too much escalation when Trump [first] hiked tariffs,” said Mao Zhenhua, an economics professor with the University of Hong Kong and co-director of Renmin University’s Institute of Economic Research.

Trump announced a cumulative 20 per cent increase to tariffs on Chinese goods after taking office in January. Last week, as part of a sweeping package of import duties on nearly every US trade partner, the president levied an additional 34 per cent.

“But [the new tariff] is boundary-testing, so Beijing had to respond differently and harshly. China’s response has also evolved, having realised that the measured approach does not work,” Mao said, calling Beijing’s counterpunch swift in contrast with other countries’ slower, more muted responses.

“The probability for both sides to meet for talks or even a turnaround is very small,” Mao added, warning all parties to “brace for impact”.

Set to take effect at noon on Thursday, China’s retaliatory universal tariffs of 34 per cent were seen as a sterner rebuke than the more selective hikes instituted after earlier US actions.